Existing home sales numbers are out...and....

The August existing home sales report came out today and there is some reason to be somewhat happy.

Somewhat.

http://www.foxbusiness.com/industries/2012/09/19/existing-home-sales-leap-78-fastest-pace-since-may-2010/

The numbers went up almost 8% last month and the average national price went up by nearly 10%.  The number of homes that are estimated to sell this year is hovering around 4.8 million...that's a lot of homes.  But when that number is placed against the 7+ million that sold in 2005, it pales in comparison.  Granted the 2005 number was during the period when you could fog a mirror to get a mortgage.

Now we have record low interest rates and the housing affordability index, while not at the highest point in recorded history like it was in February of 2012, it is off the charts compared to its ranking in 2005 at the peak of the market.  So why isn't the US home market skyrocketing?  That's simple...it is the nation's jobless rate teamed with the tightening credit markets.  No job = No mortgage

The housing market will explode at such point as the nation's jobless numbers improve...and not the fractionally decreasing jobless number that we are currently witnessing as that number declining is more a result of workers dropping out of the workforce and no longer being counted.  Not as a result of the type of job creations that are necessary to drop that number.

In watching the extracurricular activities in the middle east over the last week, it has become perfectly clear that we as a country need to become energy independent once and for all.  No more idol chatter...

We currently import roughly 9 million barrels of foreign oil each day.  At approximately $100/barrel that is nearly a billion dollars a day that we are losing in foreign trade.  What would happen if that production came domestically?  And what would the resulting effect be on the US economy?  It is staggering to even comprehend.  The amount of US jobs that would be created would immediately have a positive influence on the overall economy.  With nearly a billion dollars a day leaving our border, with much of it going to countries that are not pro-USA, it would go a long way to not only solving our own energy shortfall, but go a long way toward solving our nation's debt crisis while pulling the economic "rug" out from under those countries that do not like us.

The nation's housing crisis would also improve within a matter of about 3 years as excess inventory was absorbed and the market begin to experience an appreciatory period as a result of declining supply.  Many have said that an increase in the housing market and new home starts will stimulate job growth to take our country out of a recession.  And while that may have been true in the past, the current housing recovery will only truly come as a result of job growth first, and not due to an artificially declining jobless rate.

And that is not presently on the radar.