Simply put: don’t believe the media hype about Lowe’s and Home Depot’s better-than-expected-earnings indicating a housing recovery. This, of course, was all the rage yesterday with Lowe’s; Home Depot today. Yahoo Finance website contains the headline, “Stocks Point Higher as Home Depot Tops Forecast”—same as with Lowe’s yesterday. Merely four headlines above reads the truth: “Housing Construction Plunges to Record Low in April.”
And yet Stocks point higher? Spare me. Don’t be fooled by the profits at Lowe’s and Home Depot. The details are as common sense would expect: people have bought gardening and outdoor supplies for spring, and have done so in record numbers. Gardening is popular more than in a long time—not because, as the media will tell you, Michelle Obama started a garden—because the economy is poor and people want the perceived thrift and security of growing their own food. Both of these are illusory for inexperienced gardeners, of course, (like myself), which is reflected in the fact that everyone flocks to Lowe’s and Home Depot to buy “potting soil” “compost” and transplants. And miracle grow.
Speaking of miracles, it’s going to take one to get housing to grow again. Don’t bet your future on it.