According to the National Association of Realtors, existing home sales in August fell 2.7% from their July level–following four monthly gains– but remain above year ago levels.
“Existing home sales–including single-family, townhomes, condominiums and co-ops – declined 2.7 percent to a seasonally adjusted annual rate of 5.10 million units in August from a pace of 5.24 million in July, but remain 3.4 percent above the 4.93 million-unit level in August 2008. In the previous four months, sales had risen a total of 15.2 percent.”
According to the National Association of Realtors Chief Economist Lawrence Yun:
“Some of the give-back in closed sales appears to result from rising numbers of contracts entering the system, with some fallouts and a backlog contributing to a longer closing process, but the decline demonstrates we can’t take a housing rebound for granted.”
“The recent trend shows broad improvement in most of the country, but with an expected rise in foreclosures over the next 12 months we need to maintain a healthy level of ready buyers to absorb the inventory. An extension of the tax credit is critical to preserve incentives for financially qualified buyers to enter the market.”
The National Association of Realtors has asked its members to urge Congress to extend the first-time homebuyer tax credit into next year. It is currently set to expire November 30.
Since its inception earlier this year, this $8,000 tax credit has brought 1.2 million new buyers into the market. According to the National Association of Realtors, 350,000 of these buyers would not have purchased a home without the credit.
As posted earlier on Bull Bear Times, President Obama set a 35% tariff on tires imported from China. With this tariff about to go into effect, there have been several announcements that make one wonder, exactly who is benefiting:
- U.S. tire wholesalers are warning that prices to retailers will increase by about 15%. Others suggest the increase could be as high as 28%. Pre-tariff warehouse inventories are holding the increase down–otherwise, the increase would be even higher.
- Because of thin margins on tires, much of the increase will be passed on to the customer.
- Chinese tire makers sell the cheapest tires–resulting in a significant increase on what was once a low-price item. Low-income Americans will be most negatively impacted by this.
- The tariff could cost 20,000 jobs in the tire distribution and retail sector while saving 1,000 jobs at domestic manufacturing plants. U.S. consumers will pay $330,000 in higher prices for each of those 1,000 jobs.
According to the Tire Industry Association Executive Vice President Roy Littlefield:
“The tire manufacturers made the decision years ago to shift production of these lower-cost tires out of the U.S. All this action will do is force the tire manufacturers to shift production of these lower-cost tires to other countries, such as Brazil and India. The bottom line here is that despite what the union and the President believes, these jobs are not coming back, and now we can expect more job losses here in our already struggling economy.”
Looks like we’re saving manufacturing jobs, but it’s the consumer who’s paying the increased price. So who really benefits here?
Lesson: When government interferes with markets, there are always winners and losers.
