Besides my previous post about the Global Insights/National City report, there have been a several more in recent days.
Freddie Mac sees no crash in housing market [Reuters] or could they mean Freddie Mac sees slowdown in U.S. housing market [Reuters] posted an hour earlier by the same reporter.
White House advisers predict soft landing for economy [FT] Mr Lazear expressed confidence that rising US interest rates would not push the economy into a sharp growth slowdown. He said that while new home starts had fallen sharply, house prices continued to rise, albeit at much slower rates than in the recent past.
Soft landing in housing seen by Harvard study [MW] Climbing interest rates and cooling speculative demand is putting pressure on the housing boom, but as long as jobs continue to be created and builders curb production, the sector will experience a soft landing, according to Harvard’s Joint Center for Housing Studies.
Hmmm. Freddie Mac sees a slowdown in housing, the White House economists see a soft landing and Harvard sees a soft landing. Sounds consistent to me. Freddie Mac and White House reports have limited credibility because of their functions. Harvard’s studies are a favorite of mine but I am still not sure of the message. Afforability is weakening, the economy is not doing much and housing continues to appreciate most in the more active markets and volume is dropping off. Soft landing?
There is so much soft landing talk that I am getting a little concerned. Since when have you known so many people make the right call about a complex economy?
I yearn for the old days when the NAR told us what we wanted to hear which they did until a few months ago and we were in a state of peaceful bliss. Now we know more stuff but its comprised mainly of PR housing surveys and reports.
In Seth Joyner’s “I Want My Bubble Back!” post on Motley Fool he addresses the state of housing spin. NAR’s about-face on the housing bubble can be summed up in this quote by David Lereah, the Chief Economist:
Experiencing a slowing from a hot market is a good thing because we need a solid housing sector to provide an underlying base to the economy, and slower appreciation will help to preserve long-term affordability.
But this is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable.
Seth blames the uncritical press for letting the housing spin go on so long. Given the new public awareness of the proliferation of spin exposed in the blogosphere, I can only imagine how much longer the NAR denial would have continued without such scrutiny. However, I think the press is an easy fall guy on this matter and has been the key target of the real estate industry’s scorn. Its ironic that Joyner makes this the basis of his argument but at the other end of the spectrum.
Herein lies the conundrum.
Tags: David Lereah