the Commerce Department reported Wednesday that sales of new homes fell an estimated 5.3% in October to a seasonally adjusted annual rate of 433,000, the lowest level since 1991.
The real news on these economic indicators is that economists seemingly consistently under estimated the declines.
Now to the meat of these indicators: the price of homes. Prices have declined 7% from one year ago, to a median price of $218,000.
Let's see, the mortgage calculator would give a rough monthly payment of $1500 dollars.
What kind of salary does one need to afford a $1500 dollar house payment?
Treasury Secretary Hank Paulson thinks the whole problem of the financial crisis is because of the Pricing correction on houses. He just said this in his testimony statement before the House Finance Services Committee.
THAT'S JUST WRONG
People cannot afford these prices because they offshore outsourced the jobs, brought in cheap labor to undercut US workers and their wages and enabled the biggest global wage arbitrage since slavery!
It's also plain wrong on the cause, which is unregulated derivatives and the shadow banking system.
The median price of a home, nationwide is still over $210,000 and the fact is people simply cannot afford that. In cities where the jobs are...it's much higher.
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