Biz press ignoring that home sales still below pre-recession

Tom Blumer writes that coverage this week that new homes sales are at their highest levels in the past two-and-a-half years, but the business media has ignored the fact that the level is still below new home sales before 2008.

Blumer writes, “Here are the headlines and descriptions of today’s report found at the three major wire services:

• AP (Christopher Rugaber): Headline — ‘US NEW-HOME SALES RISE TO HIGHEST IN 2 1/2 YEARS’; Description — ‘further evidence of a sustained housing recovery that could help lift the lackluster economy.’
• Bloomberg (Alex Kowalski): Headline — ‘Home Sales Rising to Two-Year High Spur U.S. Growth’; Description — ‘the industry whose decline was at the heart of the recession is bouncing back.’
• Reuters (Lucia Mutikani): Headline — ‘New home sales jump to near 2-1/2 year high in September’; Description — ‘further evidence the housing market recovery is gaining steam.’

“Reuters actually was a bit unfair in its comparison to the past, noting that ‘new home sales are just over a quarter of their peak in July 2005.’ Unfortunately, we now know that this peak was driven by loosened lending standards and fraudulent packaging of hundreds of billions of dollars of securitized loans at Fannie Mae and Freddie Mac (perhaps as much as $2 trillion if one includes the loans the two entities kept for themselves).

“The better benchmark is the last half of the 1980s. On a population-adjusted basis, monthly and annual sales during 2012 are far less than half of what they were during that period — proof that talk of a ‘bounce-back’ is premature at best, and deceptive at worst.”

Read more here.