Economists blaming weather for the real estate/housing “pause” were cautiously optimistic for March ahead of this week’s housing data windfall.
Economists expect that sales rose 2.3 percent to a seasonally adjusted annual rate of 450,000 last month, according to a survey by FactSet.
New-home buying dipped 3.3 percent in February. Harsh winter storms that month curtailed purchases in the Northeast, while buying also fell in Western states where prices increases during 2013 have hurt affordability.
According to the Commerce Department, March was actually far worse than February, and, depending on your view of bubbles, far better.
The seasonally adjusted estimated level of new home sales fell to 384k in March from 449k in February. That was 18% below January’s pace. Unadjusted, sales in March 2014 were 12% below March 2013.
Now that winter is fading into spring, a “lack of supply” is forming as the new narrative excuse. That would be one way to explain this:
But if there was surging demand not being met by existing supply, basic, common sense economics (not orthodox) posits that we should be seeing a housing construction boom right now. After all, rising prices via a shortage screams for an increase in production, yet we have been observing the exact opposite.
Those with direct access are bidding far past what fundamental buyers (those that actually want to live in a dwelling) are able to obtain. That is not a supply problem, nor is this a market; it is the tide of intentional asset inflation.
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