CNBC Doesn’t Understand Housing

Was at a loss for words when I saw this…

Watch this video:

The fact they even state they “thought housing was turning” is stunning. The fact that they view the housing starts retraction as bad news is equally as stunning.

Supply/Demand 101. Too much supply lowers prices and low demand does the same thing. We have an over 1 yr. supply of new homes. Prices CANNOT recover until this is worked off. There are only two ways to do this. Buy more homes or build less.

Since millions of folks are losing their jobs or seeing work hours reduced and credit is being tightened, the buyer variable as salvation is out of the question. So building less new homes now is actually a good thing for the market on a long term scale. It will help reduce the inventory.

This is a point I tied to make yesterday on Wall St. Media:

All this blind rush to call a housing bottom just defies history and reality and it is dangerous for people putting money to work based on it. This was a bubble unlike any other in history, to assume it will resolve itself in less time than lesser events is just plain naive. Please ignore those who suggest it may…

Disclosure (“none” means no position):