Economy Watch: Homebuilders Still Glum
- Dec 16, 2010
December 16, 2010
By Dees Stribling, Contributing Editor
Other parts of the U.S. economy might be showing some vim lately, but the feeling doesn’t extend to the housing market. According to the latest National Association of Home Builders/Wells Fargo Housing Market Index, homebuilder confidence is still stuck in neutral.
Two out of three components of December’s index remained unchanged from the previous month, including the component gauging current sales conditions (which remained at 16) and the component gauging sales expectations in the next six months (flat at 25). The component gauging traffic of prospective buyers fell a single point, to 11.
“While the [index] is adjusted for seasonal factors, the typical cold-weather slowdown in sales activity is being accentuated by ongoing weakness in the job market, the rising number of foreclosures and short-sales, and very challenging credit conditions for both builders and buyers,” NAHB chairman Bob Jones said in a statement.
Financial Crisis Inquiry Commission Splits Along Party Lines
The Financial Crisis Inquiry Commission, which was set up by Congress to figure out what led to the Panic of 2008 and the Great Recession, appears to have come to two conclusions on the matter. Broadly speaking, one is the Democratic version and the other is the Republican version.
The official report, originally slated for release on Wednesday, will be published in early 2011. It will reflect the Democratic majority of six on the 10-person commission, and is widely expected to place most of the blame for the crisis on Wall Street recklessness: the packaging of subprime mortgages for sale, no questions asked, for example.
The Republican minority on the commission issued their own 13-page document on Wednesday that asserted that the government was mostly to blame, through bad housing policy, for the crisis, Special Republican-member blame was reserved in the document for Fannie Mae and Freddie Mac, for policies that promoted the origination of all those subprime mortgages.
CPI Edges Upward Slowly
The Bureau of Labor Statistics reported on Wednesday that the urban Consumer Price Index increased 0.1 percent in November on a seasonally adjusted basis (adjusting for doorbusters, for example). Over the last 12 months, the all-items index has increased 1.1 percent. That amounts to a nearly an inflationless era but not, with any luck, a deflationary one.
Increases in the indexes for housing and airline fares accounted for most of the rise in November, noted the bureau, while the indexes for new vehicles, used cars and trucks, and household furnishings all declined. Although the index for gasoline rose, the increase in the energy index was the smallest in five months, and the index for household energy declined.
Wall Street lost a little ground on Wednesday, with the Dow Jones Industrial Average edging down 19.07 points, or 0.17 percent, while the S&P 500 lost 0.51 percent. The Nasdaq was down 0.4 percent.