FacebookTwitterGoogle+RedditEmail

Growth Slows, Housing Fizzles

U.S. economic growth rose at an annual rate of 1.6 percent in July/September, the slowest in more than three years, the Commerce Department recently reported. By way of comparison, the nation’s rate of growth was 2.6 percent in the second quarter. What is happening to nearly slice the growth rate by half in an $11 trillion economy?

In brief, growth in residential housing dropped 17.4 percent in the third quarter. Housing’s fall was 11.1 percent in the second quarter. This downward trend has been underway for the past 12 months in the U.S. economy.

Economists have a word for two straight quarters of declining growth: recession. Is the housing dip forecasting a 2007 recession? That is unclear.

Clearly though, a recession is very bad news for the U.S. working class. On that note, housing has been a motor for employment in the building, financing and furnishing of existing and new homes. “Last year, housing could be credited for creating over 15 percent of the year’s new jobs”; reports the Economic Policy Institute, “this year housing-related jobs will account for less than 5 percent of the economy’s new jobs.”

Meanwhile, there is an excess inventory of existing and new homes nationwide. This excess is reducing home sale prices. Such price cuts take place with regularity in a market economy when supply outstrips demand, no matter the commodity.

For one U.S. trade group, it is time to step up the sales effort, presumably the key to reversing the weakening trend in residential real estate. The National Association of Realtors launched a $40 million “Buy Now” ad campaign on November 3 in major daily newspapers such as USA Today to lure potential buyers back into the housing market.

In January, the NAR ad will also appear on radio and TV stations. How much of a dent will these ads have on reducing the excess supply of U.S. residential housing? Moreover, how long will it take to bring housing supply into line with market demand?

These are not academic questions. In the meantime, home sale prices will likely continue their drop from the historic climb that seemed in hindsight to have no end. This trend is a bitter pill to swallow for sellers and their real estate agents now.

New and returning Democrats and Republicans will after the midterm elections in all likelihood have to deal with a slowing economy, thanks in no small part to a drop in housing.

SETH SANDRONSKY is a member of Sacramento Area Peace Action and a co-editor of Because People Matter. He can be reached at: bpmnews@nicetechnology.com

 

 

More articles by:

Seth Sandronsky is a Sacramento journalist and member of the freelancers unit of the Pacific Media Workers Guild. Emailsethsandronsky@gmail.com

January 16, 2019
Patrick Bond
Jim Yong Kim’s Mixed Messages to the World Bank and the World
John Grant
Joe Biden, Crime Fighter from Hell
Alvaro Huerta
Brief History Notes on Mexican Immigration to the U.S.
Kenneth Surin
A Great Speaker of the UK’s House of Commons
Elizabeth Henderson
Why Sustainable Agriculture Should Support a Green New Deal
Binoy Kampmark
Trump, Bolton and the Syrian Confusion
Jeff Mackler
Trump’s Syria Exit Tweet Provokes Washington Panic
Barbara Nimri Aziz
How Long Can Nepal Blame Others for Its Woes?
Cesar Chelala
Violence Against Women: A Pandemic No Longer Hidden
Kim C. Domenico
To Make a Vineyard of the Curse: Fate, Fatalism and Freedom
Dave Lindorff
Criminalizing BDS Trashes Free Speech & Association
Thomas Knapp
Now More Than Ever, It’s Clear the FBI Must Go
Binoy Kampmark
Dances of Disinformation: The Partisan Politics of the Integrity Initiative
Edward Curtin
A Gentrified Little Town Goes to Pot
January 15, 2019
Patrick Cockburn
Refugees Are in the English Channel Because of Western Interventions in the Middle East
Howard Lisnoff
The Faux Political System by the Numbers
Lawrence Davidson
Amos Oz and the Real Israel
John W. Whitehead
Beware the Emergency State
John Laforge
Loudmouths against Nuclear Lawlessness
Myles Hoenig
Labor in the Age of Trump
Jeff Cohen
Mainstream Media Bias on 2020 Democratic Race Already in High Gear
Dean Baker
Will Paying for Kidneys Reduce the Transplant Wait List?
George Ochenski
Trump’s Wall and the Montana Senate’s Theater of the Absurd
Binoy Kampmark
Dances of Disinformation: the Partisan Politics of the Integrity Initiative
Glenn Sacks
On the Picket Lines: Los Angeles Teachers Go On Strike for First Time in 30 Years
Jonah Raskin
Love in a Cold War Climate
Andrew Stewart
The Green New Deal Must be Centered on African American and Indigenous Workers to Differentiate Itself From the Democratic Party
January 14, 2019
Kenn Orphan
The Tears of Justin Trudeau
Julia Stein
California Needs a 10-Year Green New Deal
Dean Baker
Declining Birth Rates: Is the US in Danger of Running Out of People?
Robert Fisk
The US Media has Lost One of Its Sanest Voices on Military Matters
Vijay Prashad
5.5 Million Women Build Their Wall
Nicky Reid
Lessons From Rojava
Ted Rall
Here is the Progressive Agenda
Robert Koehler
A Green Future is One Without War
Gary Leupp
The Chickens Come Home to Roost….in Northern Syria
Glenn Sacks
LA Teachers’ Strike: “The Country Is Watching”
Sam Gordon
Who Are Northern Ireland’s Democratic Unionists?
Weekend Edition
January 11, 2019
Friday - Sunday
Richard Moser
Neoliberalism: Free Market Fundamentalism or Corporate Power?
Paul Street
Bordering on Fascism: Scholars Reflect on Dangerous Times
Joseph Majerle III – Matthew Stevenson
Who or What Brought Down Dag Hammarskjöld?
Jeffrey St. Clair - Joshua Frank
How Tre Arrow Became America’s Most Wanted Environmental “Terrorist”
Andrew Levine
Dealbreakers: The Democrats, Trump and His Wall
Jeffrey St. Clair
Roaming Charges: Que Syria, Syria
Dave Lindorff
A Potentially Tectonic Event Shakes up the Mumia Abu-Jamal Case
FacebookTwitterGoogle+RedditEmail