According to the U.S. Department of Commerce, sales of existing new homes were in the tank in January, down 12.6 percent. The dip coming after improved sales in December on the heels of an expiring tax credit in California.
Although weather is partially to blame according to Bob Nielsen, chairman of the National Association of Home Builders (NAHB), he remains concerned about meeting future demand citing “consistent unavailability of construction credit” though starts are up 14.6 percent. The increase in starts includes not only single family homes, but also multifamily.
Bad news for January comes ahead of higher expectations for early spring, as Nielsen notes spring jobs-market gains. NAHB Chief Economist says, “This latest report shows new-home sales activity returning to a rate that is consistent with the low level of activity seen in the third and fourth quarters of 2010.”
The labor department is reporting Thursday that jobless claims fell for the week ending February 19 to a more than 2.5 year low hovering around 9.0 percent, showing tepid signs of stability and steady growth.
With the FDIC urging banks to lend again, Rob Strand, Senior Economist with the American Bankers Association says, “Business loan demand is still anemic.”
Sheila Bair, chairman of the Federal Deposit Insurance Corp (FDIC) tells Reuters banks can do more, and should. Construction and development dropped 9 percent or $32.5 billion, the biggest drag. Lending is increasing slightly elsewhere, with lending for residential mortgages ticking up by $17 billion or just less than 1 percent, reports the FDIC.
As the FDIC, NAHB, ABA and others report conflicting information, the housing sector is struggling to get on the same page and agree on what the current lending realities are. What they can agree on, however, seems to be an optimistic outlook.