The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

Report: Bottom Falls Out of Housing After First-Time Buyer Tax Credit Expires

Posted on | June 2, 2010 | 8 Comments

Home sales enjoyed an uptick in April, but Diana Olick of CNBC reports that sales are now in freefall:

[Y]ou had to sign your contract by April 30th and close by June 30th in order to get your $8000 if you’re a first time buyer and $6500 if you’re a move up buyer.
And then came May, traditionally the height of the spring housing season.
Mortgage applications to purchase a home began to sink. Now, four weeks later, mortgage purchase applications are down nearly 40 percent from a month ago to their lowest level since April of 1997. . . .

Read the whole thing. The point is that this one-time injection of federal money into the housing market is like “Cash for Clunkers” — essentially buying short-term economic “good news” that won’t last because such artificial intervention does nothing to address the underlying economic fundamentals. And to once again borrow Michelle Malkin’s famous phrase, the fundamentals suck.

It is profoundly discouraging that we’ve returned to this kind of Keynesian gimmickry, which so obviously didn’t work in the 1970s and isn’t going to work now.

What’s the point of winning the “war of ideas” when the guys who lost that war are now running the government and acting as if the war had never been fought?

Category: Economics

Comments

8 Responses to “Report: Bottom Falls Out of Housing After First-Time Buyer Tax Credit Expires”

  1. Count Vikula
    June 2nd, 2010 @ 9:07 pm

    Couldn’t have said it any better, Stacy.

    That being said, Full Speed Aehad!

  2. Count Vikula
    June 2nd, 2010 @ 4:07 pm

    Couldn’t have said it any better, Stacy.

    That being said, Full Speed Aehad!

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    June 2nd, 2010 @ 6:27 pm

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  5. Gov. B
    June 3rd, 2010 @ 1:51 am

    “….essentially buying short-term economic “good news” that won’t last….”

    That’s exactly what they wanted – their media lapdogs will play up the good news and not report the later bad news at all, thus an automatic net positive for them. Why do you think they use this same worthless tactic again and again?

  6. Gov. B
    June 2nd, 2010 @ 8:51 pm

    “….essentially buying short-term economic “good news” that won’t last….”

    That’s exactly what they wanted – their media lapdogs will play up the good news and not report the later bad news at all, thus an automatic net positive for them. Why do you think they use this same worthless tactic again and again?

  7. Black Friday? : The Other McCain
    June 4th, 2010 @ 4:14 pm

    […] but I just want to point out that my persistent pessimism was somewhat prophetic this week:June 2: Report: Bottom Falls Out of Housing After First-Time Buyer Tax Credit Expires — “The point is that this one-time injection of federal money into the housing market […]

  8. Tomorrow’s Headlines Today : The Other McCain
    June 16th, 2010 @ 9:58 am

    […] TodayPosted on | June 16, 2010 | No CommentsSome things are predictable. Remember this headline?Report: Bottom Falls Out of Housing After First-Time Buyer Tax Credit ExpiresThat was two weeks ago. Today?Housing starts drop to five-month low in May. . . Groundbreaking for […]