As widely expected, existing home sales fell sharply last month. The expiration of the federal government’s home buyer tax credit was probably a factor. Whatever the reason, the news is unmistakably bearish for the housing market, with repercussions for the broader economy as well. As the National Association of Realtors (NAR) advised in a press release accompanying today’s update: “Sales are at the lowest level since the total existing-home sales series launched in 1999, and single family sales – accounting for the bulk of transactions – are at the lowest level since May of 1995.”
Daily Archives: August 24, 2010
HOW THE OTHER HALF THINKS ABOUT DEFLATION/INFLATION
The case for worrying about deflation, or at least continued disinflation, is fairly compelling, as we noted yesterday. But is deflation fate? No, at least not yet. Much depends on the Federal Reserve’s actions in the weeks ahead. There’s also the question of how the economy fares. Was the recent slowdown in economic momentum temporary–or the sign of something more ominious for the business cycle?