ECONOMIC GRIMNESS – AT 8:53 A.M. ET:  Reports on the housing market continue to raise alarm.  They get worse and worse.  People no longer see homes as an investment, and that removes much of the allure.  From the Washington Post:

Sales of new homes dropped to their lowest level since the government started tracking the numbers more than four decades ago, offering an ominous sign for the direction of the already fragile housing market.

The Commerce Department's report, released Wednesday, was the second this week to underscore home buyers' crumbling confidence.

It said new homes sold in July at an annual rate of 276,000, off 12.4 percent from June's pace while plummeting 32.4 percent from a year earlier. That's the lowest level since 1963 and far worse than what analysts expected.

The report comes a day after the National Association of Realtors said sales of existing homes in July plunged to their lowest point in more than a decade. Sales were down 27.2 percent from June, the largest monthly drop since 1968.

COMMENT:  In addition, many American homeowners are underwater.  Their homes are worth less than the cost of their mortgages.  This isn't the bill of good sold to them in other times, when they were told that real estate never goes down.  (Apparently, no one ever heard of the great Florida land bubble in the 1920s.)

In addition, many people cannot sell their homes, or cannot sell them for anywhere near what they paid for them, and are trapped.  Some of these people have become unemployed.  And all have to pay often increasing property taxes.  There's a lot of hurt out there, and it isn't being eased.

August 26, 2010