Finance from Wall Street
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Finance from Wall Street Journal
Home Data May Inspire False Hope
By Scott Patterson, April 22, 2008;PageC1
The National Association of Realtors (NAR) report on home sales came out Tuesday (April 22, 2008). The article warns that, while the numbers can be made to look good, you still have to take a look at the big picture. In February there was a 2.9% increase in the number of pre-existing home sales, which came as a surprise to economists. Economists also estimate that March sales will be down by about 2% from February. According to the author, if the report is better news than a drop of 2%, some people may claim that it is a sign that the economy is getting better. The problem with this is it disregards the fact that, while sales rose in February, they are still 24% below sales from the previous year. It also does not take into account that median home prices have dropped 8.2% from last year which is the largest recorded drop.
The second half of the article focused on a specific company that is being hit by the slowdown in home sales. Sherwin-Williams, a major manufacturer of home paint, is starting to see their income drop.
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