CounterPunch Exclusives

CounterPunch Exclusives

A Quick Visit to the Housing Market

House for sale, Williams, California. Photo: Jeffrey St. Clair.

With so much going on, I managed to miss the release of data on existing home sales for March. According to the National Association of Realtors, it was down by 3.3 percent from February and 1.0 percent from March of last year. Sales were down in all four major regions, but the drop was sharpest in the Northeast with a 8.5 percent month-over-month drop and 12.2 percent year-over-year. Interestingly, the West, which is largely California, is doing best. The one-month decline was just 1.3 percent, and sales were up 1.3 percent year-over-year.

For those who think this is a relatively mild war-related hit, think again. Existing home sales are reported based on when the sale is closed. These sales were almost all contracted in January or February, before the war started. The release shows that the housing market was weakening even before the war led to a jump in mortgage interest rates and a surge in gas prices. The data for April is almost sure to look considerably worse.

This is likely to be a big negative in second quarter GDP growth. Home sales generate considerable income for those involved in the sales process — realtors, mortgage issuers, surveyors, and then movers. Also, home buyers typically spend money on remodeling, new furniture, and appliances. The downturn we saw in March, and the bigger one we will likely see in April, are not recession stuff, but they are not helpful in an already weak economy.

Not all the news on the housing front was bad. The Realtors reported that the median home price was up just 1.3 percent........

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