Lending down, but home sales up
A realtor sign advertises a reduced price in front of a home for sale in San Anselmo, Calif.
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Steve Chiotakis: Yeah, I guess you can find a budding flower in the nastiest of landfills. And today we have yet another "on the one hand, and on the other hand" economic scenarios. And in a few hours, we'll get government figures on new home sales. They're expected to be up in June by a respectable number. But as for the banks, well they're not lending as much as they used to, and that's delaying any broad recovery in the economy. Marketplace's Mitchell Hartman explains.
Mitchell Hartman: First the bad news: Wall Street Journal analysis shows total lending by the country's biggest banks fell nearly 3 percent in the second quarter. That's despite billions in government bailout money to stabilize banks' balance sheets and encourage them to lend.
What's more, a lot of those loans turn out to be mortgage refinancings -- a kind-of re-jiggering of existing loans. That means not a lot of new money being pumped into the economy. Only about a quarter of mortgages are actually for new home purchases.
So another number this morning may seem a bit of a contradiction. It's that new home sales probably rose around 3 percent in June. Turns out even with bank lending down, home prices have fallen so much that sales are finally picking up. And that signals the housing crisis at least may finally be abating.
I'm Mitchell Hartman for Marketplace.