Surprising Decline in New Home Sales?

Posted on October 28, 2009


From the Associated Press via Breitbart:

The 3.6 percent drop in September’s new home sales, reported by the Commerce Department on Wednesday, was the first decline since March and a distinct sign of weakness in a market that had rebounded strongly over the summer.

The number of buyers snapping up new homes dipped unexpectedly last month as the effects of a temporary tax credit for first-time owners started to wear off.

Apparently this decline came as a “surprise” to Wall Street.  Are they serious?  How could Wall Street not see this coming?  As everyone knows, whenever there is some giveaway from the government, sales are going to increase.  And when the program goes away, so does the consumer.

Take the “cash for clunkers” program.  Sales went far beyond the estimates, but when the program ended, sales dropped tremendously.  After the car companies build to replace what was sold, then what? 

According to the story, there is a bright side. Orders for big ticket manufactured goods are up.  Of course they are!  Now that people have purchased homes, they have to furnish them.   But once the new home sales dry up, the bump in orders for goods will evaporate as well.

So what happens next?  With the decline in new home sales, there will be even more pressure to have Congress extend the tax credit for new home owners. And, today, it was reported that the GMAC (GM’s former financing company) is now in talks with the government for YET ANOTHER  (this makes three) infusion of taxpayer cash due to slumping sales.

The government bail outs have got to stop.   I am tired of government  choosing which industry needs help and which doesn’t.  How about giving everyone a tax break and then letting us spend our money where we want, instead of the government spending it where they want.  Let us vote with our dollars on what we think is important.  Growth will come in those areas we taxpayers think are important, and those areas which are weak will have to adapt or fail.

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Posted in: Economy