What We're Reading

Sadly wage growth......is not growing so does anyone see a resolution to this "underwater" problem other than time?   From Forbes:

A total of 9.7 million American households still have “underwater” mortgages, meaning they owe more on the home than it is currently worth. Homes in the lowest price tier are most affected, according to data released today from Zillow.

Thirty percent of homes in the bottom price tier are in negative equity, while only 18.1% of homes in the middle tier and 10.7% in top tier are underwater, according to Zillow’s Negative Equity Report. Homes are defined as top, middle, or bottom tier based on their estimated value compared to the median home price for that area. (Nationally, the median price in the top tier is $306,700; middle tier, $163,400; bottom, $98,400.)

Overall, 18.8% of homeowners were underwater during the first quarter of 2014. 

Zillow’s figures for homes with negative equity are higher than other recent reports looking at the same problem.

Some recovery.  *pfft* 

To construct this chart, we compute for each month the year-over-year house price change for all 1,220 counties for which CoreLogic reports overall house price indexes. Those price changes are ranked from highest to lowest and then reported as percentiles based on this ranking. For example, the 5th percentile tracks the 61st-lowest county-level house price change in each month. Note that an individual county can be, and often is, in different percentiles over time. Gray shading indicates an NBER recession.

Courtesy of NYFed

This visual gives one a clear perspective on what housing areas were hit the hardest during the recent financial crisis and subsequent housing (price) fall. The recovery in some areas has been amazing.

Created by Catherine Mulbrandon at VisualizingEconomics.com

The new home market, held down by high prices and low supply of units, appears to be stalling further, not accelerating, as the spring unfolds. The housing market index fell 1 point to 45 which is 3 points below the low-end forecast. And weakness is centered in current sales, down 2 points to 48 in a reading that points to further trouble for new home sales.

But expectations for future sales are strong, up 1 point to 57, while traffic is weak but improving, up 2 points to 33. Breakdowns show mid-to-high 40 readings for all regions except the Northeast which is by far the smallest region for new home sales and is lagging badly.

The new home market in general has been lagging badly, lagging both the economy and holding down the housing sector. March new home sales fell a very surprising 14.5 percent in March and today's report doesn't point to much improvement for April and May.

The "new normal"?  With new job creation being either at the very low end, or very high end of the pay range

Ever want to reach through the television screen and punch someone?  To see ANY commentator spew fairy dust and tall tales with a straight face without telling the entire picture just makes my blood boil.  Here's a portion of this discussion - full video located below

"The excess amount of young adults living at home will unwind alongside a stronger macroeconmic environment and income growth; and the inordinate amount of married couples that are residing in apartment will transition into single-family homes"

• Where's the "stronger macroeconomic environment"?  The GOP is doing everything they can to stop a minimum wage increase.  Steve, perhaps you should write your Congressman.
• Su