After seven years I guess nobody should be shocked that reports on the economy now go and put the “unexpectedly” right up top in the headline.
Anyway, here’s the story:
Contract signings to purchase previously owned U.S. homes unexpectedly declined in August for just the second time this year, signaling residential real estate might have difficulty building on recent momentum.
An index of pending home sales decreased 1.4 percent after a 0.5 percent advance in July, the National Association of Realtors said Monday. The median projection in a Bloomberg survey of economists called for the gauge to climb 0.4 percent.
A scant supply of homes for sale that’s keeping prices elevated is hampering demand. At the same time, historically low mortgage rates and steady employment gains should help underpin the market as the broader U.S. economy battles headwinds from dollar appreciation and slower overseas growth.
What’s so unexpected? The “cure” for the real estate bubble was to re-inflate home prices, and we’re supposed to be shocked that potential buyers are getting priced out of the market?
We should have learned this lesson during the Great Depression, back when all Smart Democrats™ (and not a few Smart Republicans™) thought that the way to cure poverty was to make everything — from commodities to labor — more expensive. And yet somehow laborers remained unemployed and the economy stayed in the tank until FDR died and took his ruinous economic beliefs with him.
And yet here we are again.