Yes 300,000 new home sales released today is lower than I thought it would be, but it is no surprise, even as deep a drop as it was. Last month it was 500,000. That’s a 40% drop in one month! Should drive a stake in the heart of the household formations theory of a housing rebound.
With the recent downtick in the jobs market the trend here is abysmal. Relief from the gov’t unlikely with the poisoned atmosphere in Washington. Even if there was a new rebate program recent sales figures call into question how effective it would be.
The real problem with this 300,000 number is not housing which is bad enough, but such a bad number raises serious questions about the health of the consumer in a consumer driven economy. It becomes related to the employment number when it gets this dramatically bad.
Tomorrow we have jobless claims. I make no prediction, but a shock number is possible. If there is even a material uptick in claims it will raise the odds of a double dip, along with these housing numbers.