Purchases of new houses in the U.S. plunged more than forecast in March to the slowest rate in almost 17 years as tighter loan qualifications and falling prices caused buyers to dry up. Sales fell another 8.5 percent in the latest month to an annual rate of 526,000, the fewest since October 1991, from a 575,000 pace the previous month, the Commerce Department announced today in Washington. From December 2002, until December 2006, sales of new homes exceeded one million per year, peaking at the rate of a little over 1.3 million annual new home sales in July of 2005.

I was particularly impressed with this bit of wisdom as reported in a Bloomberg news story today, “The threat of a prolonged recession is growing as lower home values constrain consumer spending and persistent declines in homebuilding subtract from economic growth.”

Gee, aren’t they geniuses?

We’ve went from a rate of 1.3 million new homes purchased per year in 2005 down to just over 526 thousand per year as of 3 years later. Housing construction accounts for almost one fourth of the economy. It is a huge portion of our economy. And the new housing industry has shrunk by 60% in a 3 year time frame. The mainstream news media presents those figures as indicating merely a risk of prolonged recession. Those numbers are absolutely horrible. Home builders are failing by the thousands. Jobs have dried up for tens of thousands of tradesmen. And this is described as only a risk of recession?

Don’t rely on the geniuses in the financial news to warn you of the real truth, that this country is headed for an economic depression. I would rate their hindsight to be 20/60, at best. I would rate their predictive abilities to be 0/0.

First time home buyers are just about locked out of the housing market. Extremely tight lending standards make it almost impossible for everyone but those with impeccable credit and tens of thousands of dollars sitting around idly in a bank account to get approved for a First time home buyer loan.

The economy is crashing. Derivatives abuses by Wall Street have ruined the financial system of the globe. The dollar will be diluted continually with each passing month as the Wall Street fat cats get bailout cash in “small” amounts of $50 to $75 billion at a whack. And as a result everything will cost more.

Get prepared while there is still time, the worst is yet to come.

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