Records on nationwide sales of new homes started being kept in the United States 47 years ago, in 1963. There have been natural “ups and downs” in the market over the decades, with some months having stronger sales than others.
But the two worst months for sales of new homes since records were first kept in 1963 both came in 2010: The worst was in May of this year, and the second worst was in August. In fact, August sales were down almost 30 percent from August 2009.
That is troubling because the construction of just one home creates about three jobs for an entire year. It also brings in about $90,000 in tax revenue over time at various levels of government, according to the National Association of Home Builders.
“Normally the building industry powers economic recoveries,” The Associated Press noted. “But housing has been at the center of this downturn and it shows no signs of recovering quickly.”
There is no “magic bullet” to get the housing market on its feet again. But it is certainly not helping that mortgages and many other types of loans will now be micromanaged by a new federal “consumer protection” czar. That’s ironic because the federal government helped cause the housing meltdown by pressing for home loans to be given to people with poor credit. Now Washington is ignoring the role it played in the meltdown and imposing regulations that may hinder legitimate home sales to people with decent credit.
Incredibly, even as the federal government claims to be “protecting” consumers, it is again promoting mortgages for little or nothing down through government-sponsored lending giant Fannie Mae. Encouraging that kind of irresponsible borrowing is not a sound way to get the housing market on track. It will cause more foreclosures, which obviously will not encourage construction of homes for sale to more responsible buyers.
The president and Democrats in Congress are also harming the chances of a housing recovery by threatening small businesses with higher taxes. That could hit home builders hard next year and reduce their incentive to build.
Washington is going in the wrong direction if it wants to revitalize the housing market.