Sales of New U.S. Homes Dropped in February to Lowest on Record "unexpectedly

Despite the inane " unexpectedly" tag that's laid on by the sycophants that write this drivel, this is pretty much what I figured. The first time home buyer credit program simply pushed up all those people plannign on buying a house to do it faster, creating an artificial "bump" similar to what the clash for clunkers program did for car sales, and now, with that over, we return to the long slow decline. The bottom line remains: financing is incredibly hard to come by because banks aren't letting go if the taxpayer money they got handed to them by the fed through TARP, and because no one in their right mind is going to take on any new obligations they don't absolutely have to with the government dead set on destroying whats left of the economy. If you don't have a job, you can't buy a house, if you do have a job, you're afraid you'll lose it.

Now, if the government had just let things run their natural course, we would have seen a rash of ( well deserved ) giant bank failures, a rash of (equally well deserved ) foreclosures, and then, like spring after a bad winter, tons of smaller, smarter banks rising up to replace the old, a glut of suddenly affordable houses as the prices dropped due to the foreclosures, and another housing boom as first time homebuyers snapped up all the bargains.

But instead, we rewarded stupid lending by propping up the big banks, we rewarded stupid borrowing by propping up the people who bought houses they couldn't afford, and we're still in a long slow freefall.

The bottom line, as always, capitalism works, the free markets work, and government intervention is nearly always a disaster in the long term.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8xSP8Wb3iW8