Homeownership Falls as People Move Back in With Family

This chart pretty much sums up what has happened in the current economy and just how many of the younger generations have been closed out of the housing market. I continue to maintain that a stable housing market that is within reach of those with decent employment is key to an economic recovery - and I don't see it happening anytime soon. Last months sales were down 30% from a year earlier - and last years figures were horrible. Meanwhile, foreclosures continue to put downward pressure on home prices in many markets.

Why Is Anyone Listening to the GOP?

As the terrible economic results of the failed policies of the GOP continue to escalate and make themselves increasingly widely felt, one has to wonder why anyone - including the political pundits - are even bothering to listen to the hyperventilating of Congressional Republicans. These folks are the ones who constantly wanted to cut regulations and chanted a mantra of let the free market system decide. Now, with unfettered capitalism and rank greed having trashed the financial system and the economy these people want to do nothing or invoke a spending freeze - as if they worried when the Chimperator's regime destroyed the surplus left by the Clinton administration or dragged the country into the budget black hole called Iraq. Just how bad is the aftermath of 8 years of GOP misrule? Very bad based on a New York Times story that looks at the continued downward spiral on the employment front. Here are some highlights:

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The unemployment rate surged to 8.1 percent, from 7.6 percent in January, its highest level in a quarter-century. In key industries — manufacturing, financial services and retail — layoffs have accelerated so quickly in recent months as to suggest that many companies are abandoning whole areas of business.

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The grim scorecard of contraction in the American workplace released by the Labor Department on Friday largely destroyed what hopes remained for an economic recovery in the first half of this year, and it added to a growing sense that 2009 is probably a lost cause.

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Since the recession began, the economy has eliminated a net total of roughly 4.4 million jobs, with more than half of those positions — some 2.6 million — disappearing in the last four months alone. This rapid deterioration has prompted talk that some industries are being partly dismantled. Layoffs are multiplying because of dysfunction in the financial system, which is prompting even healthy companies to shed workers and shut down operations out of concern they may soon lose access to credit.

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American car sales have dropped to an annual pace of nine million, from some 17 million in 2007. Even if sales increase considerably, that is likely to leave a lot of unneeded auto factories.

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The stimulus spending bill signed last month includes $4.5 billion for job training. That only begins to address an area long neglected, said Andrew Stettner, deputy director of the National Employment Law Project in New York. In current dollars, the nation devoted the equivalent of $20 billion a year to job training in 1979, compared with only $6 billion last year, Mr. Stettner said. “We have to seriously look at fundamentally rebuilding the economy,” he said. “You’ve got to use this moment to retrain for jobs.”

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Another New York Times story looks at the bleak outlook for the spring home sale market. Again, the Republican Party bears primary responsibility for the current economic melt-down which began with the out of control and unregulated sub-prime mortgage industry. Why do we care what the GOP has to say now? Here's a glimpse of the story on home sales:

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For would-be sellers, the bad news keeps coming. This week, one new report showed that one in nine mortgages was delinquent or in foreclosure, while another showed that January contract signings for sales of previously owned homes fell at their fastest pace in two years.

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In recent months, many banks and mortgage companies have suspended foreclosures voluntarily or because of state moratoriums meant to encourage negotiations between delinquent borrowers and lenders. Experience, however, shows that these suspensions merely delay foreclosures, and that foreclosed homes soon flood the market. Another big concern is that homeowners with solid credit records will fall behind on their mortgages in greater numbers as unemployment rises.

Bush/Cheney's Parting Gift: Home Sales and Prices Drop at Record Pace

The economic gift of the Chimperator and the rubber stamp, more deregulation GOP Congress that he had for six and one half years just keeps on giving - bad news that is. Home sales and home prices dropped at a record rate last month and sadly things do not appear to be bottoming out as yet. As I have been saying since the summer of 2007 or longer, unless and until the residential real estate market is stabilized and turned around, the larger economy will continue to nose dive. Supposed foreclosure assistance is not yielding results and the banking institutions that have received billions of dollars in taxpayer funds are not passing the relief on to consumers either in terms of loan modifications or easing the difficulty many credit worthy borrowers are experiencing in securing loans. What may turn out to be a refinance boom may save some working in the real estate industry, but it will otherwise probably yield little boost to the economy. Here are some highlights from Reuters:

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The pace of existing home sales plunged a record 8.6 percent in November and prices fell a record amount as layoffs and a stock market crash worsened an already grim housing market, a real estate trade group said Tuesday. The median home price fell 13.2 percent on an annual basis, down for a fifth straight month to $181,300. It was the largest drop since the current data series began in 1968 and probably the largest since the Great Depression.

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The quickly deteriorating conditions in the job market, stock market and consumer confidence in October and November have knocked down home sales to another level," Yun [Lawrence Yun, the chief economist for the National Association of Realtors] said. "It is, therefore, imperative to provide incentives for homebuyers to get back into the market, Yun said.

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The housing malaise, which triggered a global financial crisis, has infected other sectors of the broader economy and sent unemployment rates higher. Analysts says stability in the housing sector is key to any recovery in the U.S. economy, which has been in a recession since late last year.