Endless winter

As noted by Calculated Risk, global warming or no, the spring selling season for new homes never seemed to arrive this year.

There is a strong seasonal component to new home sales. In a typical year, the number of homes sold each month in March through May would be 40% higher than in December. Nine years out of 10, the rate would be at least 20% higher. This year? Only 9%.

nhs_seasonal_jun_08.gif

And December 2007 was itself down 38% from December 2006 and down 50% from December 2005.Why no spring? This graph from Peter Hooper may have something to do with it.

Hooper_securitization_apr_08.gif

Originally published at Econbrowser and reproduced here with the author’s permission.