Now They Tell Us

A week ago roughly I commented on the resurgent housing market (link), interpreting it as the return of home buyers, who really need housing, after a seven-year period of slumping. Today comes a rather startling news story; I saw it in the New York Times. It turns out that most of the home purchases have been made by investment houses acting, evidently, to “create” confidence. If that’s what they were doing, this news should dampen whatever confidence was there. “Nationwide,” NYT writes, “68 percent of the damaged homes sold in April went to investors, and only 19 percent to first time home buyers, according to Campbell Housing-Pulse.” That word, “damaged,” refers to impacted in price by the housing slump. Most of the houses bought by investment houses are being rented—awaiting higher prices yet when, presumably, they will be unloaded. Can news be trusted any longer? Every story about the economy’s turn-around (“At last!”) by media commentators cited the surge in home purchases—and that surge was interpreted as a shift in “consumer” confidence—rather than as Wall Street manipulation.