Some quick notes of caution, culled in recent days from The Associated Press, to members of the Obama administration who insist that the economy is enjoying a strong recovery -- and who not-so-subtly hint that we shouldn't believe our lying eyes, which see things rather differently:
• Sales of new homes fell 7.1 percent in March -- the biggest drop in more than a year. This is a serious sign of economic weakness, because robust construction of new homes supports many jobs and provides significant tax revenue at various levels of government. To be precise, construction of a typical home creates some $90,000 in tax revenue over time and sustains three jobs for a year. And yet current sales of new homes are only half what economists generally consider evidence of a healthy market, so those jobs are scarce and revenue to support government services continues to suffer.
• Even for those new homes that did sell in March, the average price was down by 1 percent from the prior month.
• Sales of previously owned homes fell by nearly 3 percent in March and also are well below what is considered a decent rate.
• And then there is this scary warning from an analyst at IHS Global Insight: "Foreclosures, excess supply and weak demand will drive home prices ... down at least another 5 percent." That is, of course, on top of the massive decline in Americans' personal wealth from previous drops in the value of homes -- many families' biggest investment.
The outlook for a significantly improved housing market is grim as well. About 800,000 homes were foreclosed upon in 2011, besides the millions that already had been foreclosed upon over the past few years. But this year is expected to be even worse than last. Roughly 1 million homes are likely to be foreclosed upon in 2012.
That represents grievous, direct financial pain for many Americans and a much broader economic weakness that weighs even on those of us who are not so unfortunate as to face foreclosure.
It cannot be repeated too often that these are the disastrous consequences of government micromanagement of the housing market and of federal pressure on lenders to lend to home buyers who were poor credit risks.
What is far less certain is whether Washington has learned its lesson or is just waiting for the next opportunity to meddle in the market and create some fresh disaster.
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