Dog Brothers Public Forum
Return To Homepage
Welcome, Guest. Please login or register.
September 18, 2014, 04:46:56 AM

Login with username, password and session length
Search:     Advanced search
Welcome to the Dog Brothers Public Forum.
82521 Posts in 2250 Topics by 1062 Members
Latest Member: seawolfpack5
* Home Help Search Login Register
+  Dog Brothers Public Forum
|-+  Politics, Religion, Science, Culture and Humanities
| |-+  Politics & Religion
| | |-+  Housing/Mortgage/Real Estate
« previous next »
Pages: 1 ... 3 4 [5] 6 7 ... 10 Print
Author Topic: Housing/Mortgage/Real Estate  (Read 41050 times)
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #200 on: February 01, 2012, 08:56:29 AM »

It was a bubble.

It burst.

Just like the NASDAQ, (now, ten years later, about 55% of what it was at the peak) it is not coming back.
Logged
G M
Power User
***
Posts: 12040


« Reply #201 on: February 01, 2012, 12:19:28 PM »

It was a bubble.

It burst.

Just like the NASDAQ, (now, ten years later, about 55% of what it was at the peak) it is not coming back.

I think we have yet to hit bottom.
Logged
JDN
Power User
***
Posts: 2004


« Reply #202 on: February 09, 2012, 09:30:37 AM »

A bailout for people who bought houses they couldn't afford and had no business buying in the first place.   sad

If I bought a car I couldn't afford, and didn't make the payments, the bank would repo it.  What's the difference?
I have absolutely no sympathy.

http://www.latimes.com/business/money/la-fi-mo-mortgage-settlement-20120209,0,7611524.story
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #203 on: February 09, 2012, 10:42:33 AM »

Quick!  Get me my sunglasses lest I be blinded by the brilliant light eminating from this moment of utter lucidity!  cheesy grin
Logged
JDN
Power User
***
Posts: 2004


« Reply #204 on: February 09, 2012, 11:13:31 AM »

 grin

Actually, if you read my previous posts, I have been consistently against any bailout for foreclosures; further I have shown absolutely no sympathy
for those that bought a house WAY beyond their means, didn't make the payments, lived in it in essence for free, and now expect to be bailed out
because it's in foreclosure. 

I'm tired of seeing heart wrenching pictures of a mother and two children being evicted from the $800,000 home when she makes $25K per year. 
She never should have bought the house in the first place.  She had a free ride; she should say "thank you" and move on.  It's like my checking into
the Ritz Carlton, paying only the first week, but staying for a whole year, then blaming the Ritz Carlton.
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #205 on: February 09, 2012, 11:26:10 AM »

Amen!!!
Logged
DougMacG
Power User
***
Posts: 5944


« Reply #206 on: February 09, 2012, 12:56:04 PM »

One of my media issues but I saw a headline in our local paper about "Foreclosure Victims".

Who is the victim in a foreclusure.  One party lends the money with the right to take back the house if timely payments are not made.

One party agrees to make timely payments or give back the house and gets full possession of the house for that period of time until paid in full or defaulted.

In either outcome, I fail to see a victim.  They were maybe a victim of job or income loss perhaps, but a victim of foreclosure? How?

If you can't take the house back - in a timely and cost effective manner, who would ever lend?  How many homeowners would we have then?

I will be attending the award ceremony for JDN on this issue!
Logged
G M
Power User
***
Posts: 12040


« Reply #207 on: February 11, 2012, 11:52:28 AM »

http://www.cnbc.com/id/46308436

Government Bailout Actually Hurt Housing Recovery: Zell
Published: Wednesday, 8 Feb 2012 | 8:56 AM ET Text Size By: Jeff Cox
CNBC.com Senior Writer
Government intervention has prevented the real estate market from healing, with the commercial sector hit especially hard, investor Sam Zell said.

 

 
As sales languish and prices continue to fall, the head of Equity Group Investments and numerous other ventures pinned the blame on policies that refused to allow market forces to take hold.

"Rather than let the elements of the business world take care of the problems, we basically stopped the process of creating market clearing," Zell said in a CNBC interview. "Had we allowed the market to clear without trying to stop reality...we would have a healthy housing market today."

Since the financial crisis began in 2008, Washington lawmakers and President Barack Obama have launched a counterattack against the housing market's collapse.

Most prominently, the administration implemented the Home Affordable Modification Program, aimed at helping as many as four million distressed homeowners refinance their mortgages at affordable terms. However, the program has reached only about one-fourth its original goal.

In his state of the union address, Obama pledged to expand the efforts to include even those buyers whose mortgages are not owned by government-sponsored enterprises Fannie Mae or Freddie Mac.

"It's putting off facing up to reality," Zell said in describing the efforts to halt foreclosures. "The longer we avoid clearing the longer we're going to be living with this problem."


Zell drew a distinction between the housing programs and the bailout efforts for big Wall Street financial institutions that he said were necessary to save the national economy.



"If our banking system didn't work, the calamity is almost immeasurable," he said. "So to try and equate coming in and in effect protecting the banking system with protecting the housing market is apples and oranges."

While the foreclosure robo-signing scandal is played out in the courts and the housing market languishes, Zell said banks should take action.

"The first thing I would do is I would encourage lenders to move forward and exercise their legal rights, literally — not so much to hurt anybody but to resolve the issues," he said. "Remember, we're different from any other country in the world. We are the only country in the world where you can borrow money on a house and walk away from it."

Zell said he likely won't be making any big investments in housing soon, as "execution" remains a problem when dealing with so many homes. Commercial real estate, meanwhile, remains problematic as well.

During the downturn in the early 1990s, Zell said he advised "stay alive until '95." Now, his mantra is "come clean by '13."

"Commercial real estate still has another couple years to get its act together," he said. "That's literally the point at which all of these extensions and other stuff get cleared out. Because otherwise you're going to have a commercial real estate market that doesn't work."
Logged
DougMacG
Power User
***
Posts: 5944


« Reply #208 on: February 11, 2012, 01:50:50 PM »

"Government Bailout Actually Hurt Housing Recovery"

Yes.  The real force of the crash came from the size of the bubble.  every poicy I can think of was designed to slow or prevent the correction.  All the underlying causes are still largely in place.

Housing comes back when employment and income comes back.  Of course a big part of the employment problem is zero construction.  If you artificially stimulate that, you re-inflate the bubble.

We learned from that problems of letting the mortgage industry become 90% federal government.  Now it will be 100%.  The Fed is holding interest at roughly zero.  Savings interest is 0.  Energy costs nearly double.  Property taxes up.  5.5 million people left the work force.  Young adults and old adults moving back ini with family.  Fine, but no help for the demand for housing.  Or the affordability.
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #209 on: February 16, 2012, 10:04:43 AM »


http://www.nytimes.com/2012/02/16/business/california-audit-finds-broad-irregularities-in-foreclosures.html?_r=1&nl=todaysheadlines&emc=tha2

An audit by San Francisco county officials of about 400 recent foreclosures there determined that almost all involved either legal violations or suspicious documentation, according to a report released Wednesday.

 
Phil Ting, the San Francisco assessor-recorder, found widespread violations or irregularities in files of properties subject to Anecdotal evidence indicating foreclosure abuse has been plentiful since the mortgage boom turned to bust in 2008. But the detailed and comprehensive nature of the San Francisco findings suggest how pervasive foreclosure irregularities may be across the nation.

The improprieties range from the basic — a failure to warn borrowers that they were in default on their loans as required by law — to the arcane. For example, transfers of many loans in the foreclosure files were made by entities that had no right to assign them and institutions took back properties in auctions even though they had not proved ownership.

Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #210 on: February 16, 2012, 11:24:19 AM »



Data Watch
________________________________________
Housing starts increased 1.5% in January to 699,000 units at an annual rate To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 2/16/2012
Housing starts increased 1.5% in January to 699,000 units at an annual rate, easily beating the consensus expected pace of 675,000.  Starts are up 9.9% versus a year ago.
The increase in starts in January was all due to multi-family units, which are extremely volatile from month to month.  Single-family starts dipped 1.0%.  Multi-family starts are down 4.0% from a year ago while single-family starts are up 16.2%.
 
Starts rose in all regions of the country, except the Midwest.
 
New building permits increased 0.7% in January to a 676,000 annual rate, slightly below the consensus expected pace of 680,000. Compared to a year ago, permits for multi-unit homes are up 55.0% while permits for single-family units are up 6.2%.
 
Implications: More up-beat numbers on the housing market today.  Housing starts easily beat consensus expectations for January and were revised up for prior months as well.  Looks like the first quarter of 2012 will be the fourth straight quarter where home building boosts real GDP.  Although the gains in January were all in the volatile multi-family sector and were likely boosted by unusually mild January weather, today’s figures reinforce the upward trend for home building.  Single-family starts are up 16.2% from a year-ago and the top chart to the right shows the strength in multi-family construction.  Meanwhile, permits for future construction continue to gain.  Notably, the number of single-family homes under construction increased 2.1% in January, the largest gain since 2004.  The number of single-family starts exceeded the number of completions by an annualized 119,000 in January, the widest gap since the peak of the housing boom back in early 2006.  As we wrote a few months ago, the long-awaited turning point in home building has arrived.  Based on population growth and “scrappage,” home building must increase substantially over the next several years to avoid eventually running into shortages.  For more on the housing market, please see our research report (link).  In other news this morning, the Philadelphia Fed index, a measure of manufacturing activity, increased to +10.2 in February from +7.3 in January.  Once again, reports show both factories and home builders lifting economic growth.
Logged
G M
Power User
***
Posts: 12040


« Reply #211 on: February 21, 2012, 10:01:09 AM »

http://www.forbes.com/sites/realspin/2012/02/20/the-robo-signing-settlement-seeds-of-recovery-or-chaos/

The "Robo-Signing" Settlement: Seeds of Recovery, Or Chaos?

George Mason law professor Todd J. Zywicki fears that the “robo-signing” agreement will lead to further efforts to bleed the banks, all the while delaying the necessary clearing of the housing market.  The U.S. economy will be the potential victim of continued uncertainty. 

After over a year of wrangling, last week the Obama Administration and 49 state attorneys general announced that they had reached a comprehensive settlement with five large mortgage servicers over claims related to their infamous “robo-signing” foreclosure practices.

The settlement provides $25 billion to state governments and homeowners in the form of principal reductions and cash payments, a figure that would rise if other banks sign on. In addition to imposing punishment and providing recompense for alleged past misbehaviors, the settlement provides much-needed relief and a path to recovery for a housing market paralyzed by the continued uncertainty concerning the ability of lenders to foreclose on nonperforming loans.

Or does it?

No sooner had the long-awaited settlement been announced than activists were beating the drum for more litigation, more penalties—and more uncertainty in the housing market. New York State Attorney General Eric Schneiderman called the settlement a “down payment” on compensating foreclosed homeowners and vowed to press for continued civil and criminal prosecutions.

Similarly, Janis Bowdler of the Latino civil rights group the National Council of La Raza characterized the settlement as merely the “first installment” of continued demands against the mortgage industry. In fact, while the settlement releases participating banks from conduct related to mortgage loan servicing, foreclosure preparation, and mortgage loan origination services, it permits further civil and criminal government prosecutions and piling on by class action lawyers.

Here regulators should be cautious about efforts to bleed still further dollars out of the banking industry through endless and protracted litigation. Some critics doubt whether the $25 billion settlement reached last week is sufficient punishment for the misdeeds of the banking industry. Others argue—perhaps with even greater justification—that the settlement provides an unjustified windfall to delinquent borrowers who suffered no actual harm as a result of the banks’ shoddy foreclosure practices, and homeowners who are underwater (those who owe more than their houses are worth) often times because of their own decisions to make minimal downpayments or to suck out home equity at the top of the housing bubble (Oklahoma’s Attorney General Scott Pruitt was the lone holdout among state AG’s, refusing to sign the deal because it favors defaulters over those who have paid their mortgages).
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #212 on: February 22, 2012, 12:24:52 PM »

Existing home sales increased 4.3% in January to an annual rate of 4.57 million units To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 2/22/2012
Existing home sales increased 4.3% in January to an annual rate of 4.57 million units.  The monthly increase was larger than the consensus expected, but the level was lower because December was revised down significantly.  Existing home sales are up 0.7% versus a year ago.
 
Sales in December were up in all major regions of the country. Most of the increase in overall sales was due to single-family homes; sales of condos/coops also rose for the month.
 
The median price of an existing home fell to $154,700 in January (not seasonally adjusted) and is down 2.0% versus a year ago. Average prices are down 2.2% versus last year.
 
The months’ supply of existing homes (how long it would take to sell the entire inventory at the current sales rate) fell to 6.1 in January from 6.4 last month.  The decline in the months’ supply was mostly due to a faster pace of sales. The inventory of homes for sale also fell slightly.
 
Implications: Home sales are slowly but surely headed up. Existing home sales increased 4.3% in January to the highest level since May 2010.  More importantly, the inventory of existing homes is down 21% versus last year and at the lowest level since 2005.  As a result, the months’ supply of unsold homes is down to 6.1, the lowest since March 2005.  Even with this great news the National Association of Realtors said cancelled contracts to buy existing homes remained at 33% in January, which is three times the normal level. These figures suggest that, despite record low mortgage rates, home buyers still face very tight credit conditions. Tight credit conditions would also explain why all-cash transactions accounted for 31 percent of purchases in January versus a traditional share of about 10 percent.  Those with cash are able to take advantage of home prices that are extremely low relative to fundamentals (such as rents and replacement costs); for them, it’s a great time to buy.  With credit conditions remaining tight, we don’t expect a huge increase in home sales any time soon, but, inventories are in decline and the housing market is on the mend.
Logged
G M
Power User
***
Posts: 12040


« Reply #213 on: March 18, 2012, 11:23:43 AM »

http://www.doctorhousingbubble.com/short-sales-foreclosures-pasadena-foreclosure-and-short-sale-shadow-inventory-2012/

Short sales and foreclosures made up 52 percent of all recent Southern California home sales – Lenders aggressively pricing lower-end properties to move. Two Pasadena examples.


The Southern California housing market is starting to have fewer places to hide in regards to zip codes immune to the correction.  The latest data shows a fractured market where over 52 percent of all home sales in the last month were distressed properties.  This is clearly not your father’s housing market.  We are deep into uncharted waters and as the shadow inventory begins to leak out into the market, we are starting to get a sense of how lenders are approaching the clearing out of inventory.  Much is being made about the recent jump in sales but put into context as you will see, is nothing more than bouncing along the bottom.  Some tend to think that once a bottom is reached that we will somehow have another boom.  That is highly unlikely unless the overall economy and more importantly, wages improve.  No one is going to buy a McMansion with a McDonald’s income anymore.  The boom lasted for a decade but was completely based on artificial mortgage products that no longer exist (and likely will never come back).  We will also look at the low end of the correction in mid-tier cities like Pasadena.
Logged
DougMacG
Power User
***
Posts: 5944


« Reply #214 on: March 18, 2012, 12:12:53 PM »

Actually ready to rebound by spring of 2013, this pretend optimism is another way of confirming what PP told us a year ago - to get ready for at least 2 more years of downward movement.  So far, pp has been right on the money.

http://online.barrons.com/article/SB50001424053111904797004577281453828447714.html?mod=BOL_hpp_highlight_top#articleTabs_article%3D1

After falling 34% over the past six years, U.S. home prices will soon bottom. They could turn back up by spring 2013.

(nice ads at the link, try 4 weeks free!)
--------------------
My prediction was that the housing rebound is tied to the employment and income rebound which is inextricably tied to the Nov 6 election and the policies and expectations that come out of it.

Point of clarification: a 2 or 3% bump following a 40% collapse is not exactly a 'rebound'. 
Logged
G M
Power User
***
Posts: 12040


« Reply #215 on: March 25, 2012, 05:46:42 PM »


http://reason.com/archives/2012/03/23/no-this-is-not-a-housing-recovery

No, This Is Not a Housing Recovery

Anyone who says we are in the midst of a housing recovery is wrong.

Anthony Randazzo | March 23, 2012



We have not reached the bottom of the housing market. I hate to say it. I really do hate to always be the pessimist. And I don’t say this because I’ve been steeped in a couple decades' worth of bitterness as a Red Sox fan. The numbers are just not adding up to recovery.
 
It is all the rage these days to talk about how we are finally seeing recovery in the housing market, and that pretty soon we’ll be back to home price growth. Analysts point to the decline in housing inventory, lower rates of unemployment, higher rates of affordability, increases in housing starts, and even growing stock values for publicly traded homebuilders.
 
But this optimism will disappear faster than the enthusiasm for Kony2012 once the next wave of downward home price pressure hits. Describing the current housing market situation as being in the eye of a hurricane is not exactly accurate, but it is fair to say there is another storm gathering that will hit housing hard in the next few years—and it is impossible to stop.
 
The storm is a mix of delayed pressure as a result of the quantitative easing of the shadow inventory, and a troubling historical trend.
 
The first pressure system comes in the form of rising mortgage rates. The Fed’s quantitative easing has succeeded in pushing down long-term interest rates and subsequently mortgage rates over the past few years. (QE1 had more to do with this than QE2, but who’s counting.) But whether you think this is a good thing or not, with mortgage rates in the 3 percent to 4 percent range, the only direction they really can go from here is up. A 30-year fixed-rate mortgage at 2 percent is just not worth the risk of lending. It might be several more years before the Fed eases off the quantitative gas pedal, but when it does so interest rates, and with them mortgage rates, will rise. And when mortgage rates rise that puts downward pressure on housing prices since more expensive mortgages mean reduced demand and the need to lower home prices to compensate.
 
The second element of the coming storm is that while today’s inventory of homes has indeed declined to a much more manageable level, the shadow inventory of homes remains high. While there are currently around 3 million homes for sale in America, once you factor in the homes that are in serious delinquency (i.e., more than four months past due), homes in the foreclosure process, and homes that banks have seized but not put on the market yet, the housing inventory is closer to 10 million homes. Estimates on this do vary, but even the most recent National Association of Realtors data shows a 35-months supply of homes in Florida, and a 41-months and 65-months supply of homes in New York and New Jersey, respectively. The challenge is that once all these other millions of homes hit the market, they will also add downward pressure to housing prices.
 
The third thing to consider is that history looks to be anti-recovery right now. It is true, as a number of analysts have pointed out recently, that real housing prices (meaning inflation adjusted) have fallen to their long-term trendline. If you discount the most recent housing bubble as fueled by a host of poor policy choices made in the 1990s (such as homeownership goals, Fannie Mae and Freddie Mac’s attempts at dominating the market and advancing taxpayer guaranteed mortgage-backed securities, and the Community Reinvestment Act of 1995), then the historical trend since World War II would suggest that housing prices should be where they are at today. But even if indicators say this should be the bottom, the historical trend has also featured multi-year long “over corrections” after housing bubbles.
 
In the below graph, you’ll notice that after a housing bubble peaked in 1978 it slowly declined and hit the historical trendline in 1981. But it continued falling and didn’t come back up to the trendline until 1986. Similarly, the housing bubble that peaked in 1989 declined a bit faster and hit the average trendline in 1991, but it wasn’t until 1998 as the massive 21st century housing bubble began to build that prices got back to their trendline.

**Read it all.
Logged
G M
Power User
***
Posts: 12040


« Reply #216 on: April 05, 2012, 07:33:48 AM »

http://www.reuters.com/article/2012/04/04/us-foreclosure-idUSBRE83319E20120404

(Reuters) - Half a decade into the deepest U.S. housing crisis since the 1930s, many Americans are hoping the crisis is finally nearing its end. House sales are picking up across most of the country, the plunge in prices is slowing and attempts by lenders to claim back properties from struggling borrowers dropped by more than a third in 2011, hitting a four-year low.

But a painful part two of the slump looks set to unfold: Many more U.S. homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures.

"We are right back where we were two years ago. I would put money on 2012 being a bigger year for foreclosures than 2010," said Mark Seifert, executive director of Empowering & Strengthening Ohio's People (ESOP), a counseling group with 10 offices in Ohio.

"Last year was an anomaly, and not in a good way," he said.

In 2011, the "robo-signing" scandal, in which foreclosure documents were signed without properly reviewing individual cases, prompted banks to hold back on new foreclosures pending a settlement.

Five major banks eventually struck that settlement with 49 U.S. states in February. Signs are growing the pace of foreclosures is picking up again, something housing experts predict will again weigh on home prices before any sustained recovery can occur.

Mortgage servicing provider Lender Processing Services reported in early March that U.S. foreclosure starts jumped 28 percent in January.

More conclusive national data is not yet available. But watchdog group, 4closurefraud.org which helped uncover the "robo-signing" scandal, says it has turned up evidence of a large rise in new foreclosures between March 1 and 24 by three big banks in Palm Beach County in Florida, one of the states hit hardest by the housing crash

Although foreclosure starts were 50 percent or more lower than for the same period in 2010, those begun by Deutsche Bank were up 47 percent from 2011. Those of Wells Fargo's rose 68 percent and Bank of America's, including BAC Home Loans Servicing, jumped nearly seven-fold -- 251 starts versus 37 in the same period in 2011. Bank of America said it does not comment on data provided by other sources. Wells Fargo and Deutsche Bank did not comment.

Housing experts say localized warning signs of a new wave of foreclosure are likely to be replicated across much of the United States.

Online foreclosure marketplace RealtyTrac estimated that while foreclosures dropped slightly nationwide in February from January and from February 2011, they rose in 21 states and jumped sharply in cities like Tampa (64 percent), Chicago (43 percent) and Miami (53 percent).

RealtyTrac CEO Brandon Moore said the "numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed."

One big difference to the early years of the housing crisis, which was dominated by Americans saddled with the most toxic subprime products -- with high interest rates where banks asked for no money down or no proof of income -- is that today it's mostly Americans with ordinary mortgages whose ability to meet payment have been hit by the hard economic times.

"The subprime stuff is long gone," said Michael Redman, founder of 4closurefraud.org. "Now the folks being affected are hardworking, everyday Americans struggling because of the economy."

"HARD TO CATCH UP"

Until December 2010, Daniel Burns, 52, had spent his working life in the trucking industry as a long-haul driver and manager. When daily loads at the small family business where he worked tailed off, he lost his job.

Unable to cover his mortgage, Burns received a grant from a government fund using money repaid from the 2008 bank bailout. That grant is due to expire in early 2013 and Burns is holding out on hopeful comments from his former employer that he might get his job back if the economy recovers.

"If things don't pick up, I will be out on the street," he said, staring from his living room window at two abandoned houses over the road in the middle-class Cleveland suburb of Garfield Heights, the noise of traffic from a nearby Interstate highway filling the street.

Underscoring the uncertainty of his situation, Burns' cell phone rings and a pre-recorded message announces that his unemployment benefits are due to be cut off in April.

A bit further up the shore of Lake Erie, Cristal Fell, who works night shifts entering data for a trucking company in Toledo, has fallen behind on her mortgage a second time because her ex-husband lost his job and her overtime was cut.

"Once you get behind it's so hard to catch up," she said.

Fell, a mother of four, hopes the economy will gather enough speed to help her avoid any risk of losing her home. Her ex-husband has found a new job and she is getting more overtime, so she hopes she can catch up on her mortgage by the fall.

Burns and Fell are the new face of the U.S. housing crisis: Middle class, suburban or rural with a conventional 30-year fixed mortgage at a reasonable interest rate, but unemployed or underemployed. Although the national unemployment rate has fallen to 8.3 percent from its peak of 10 percent in October 2009, nearly 13 million Americans remain jobless, meaning many are struggling to keep up with their mortgage payments.

Real estate company Zillow Inc says more than one in four American homeowners were "under water" or owed more than their homes were worth in the fourth quarter of 2011. The crisis has wiped out some $7 trillion in U.S. household wealth.

"We're seeing more people coming through who have good loans with reasonable interest rates," said Ed Jacob, executive director of non-profit lender Neighborhood Housing Services of Chicago Inc, which provides foreclosure counseling. "But in many households only one person works now instead of two, or they had their hours cut."
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #217 on: April 24, 2012, 12:03:18 PM »



New single-family home sales declined 7.1% in March
       
       
               
                       
                               
                                        Data Watch
                                       
                                       
                                        New single-family home sales declined 7.1% in March To view this article, Click
Here
                                       
                                        Brian S. Wesbury - Chief Economist
 Robert Stein - Senior Economist

                                       
                                        Date: 4/24/2012
                                       

                                       

                                               
                                                        New single-family home sales declined 7.1% in March, but, at a 328,000 annual
rate, still beat the consensus expected pace of 325,000.
 
Sales were down in the West and Midwest, but up in the South and Northeast.
 
The months’ supply of new homes (how long it would take to sell the homes in
inventory) rose to 5.3.  The rise in the months’ supply was all due to a
slower selling pace. Inventories declined to a new record low (dating back to 1963).
 
The median price of new homes sold was $234,500 in March, up 6.3% from a year ago.
The average price of new homes sold was $291,200, up 11.7% versus last year.
 
Implications:  Please ignore the headline of a 7.1% drop in new home sales in March.
It’s very misleading. The reason for the drop is that February sales were
revised up substantially, to a 353,000 annual rate from a prior estimate of only
313,000. In this situation, it’s more important to look at the level of sales
in March (328,000 annualized), which narrowly beat consensus expectations (325,000)
and is up 7.5% from a year ago. The bad news for builders of single-family homes is
not completely over. Now that banks can move forward with foreclosures more quickly,
a large inventory of bargain-priced existing homes could temporarily attract some
buyers away from the new home market. But, the road ahead looks better than
it’s looked in years. The upward trend in home sales is only one piece of good
news for builders. Another is that the total inventory of new homes is at a new
record low (see lower chart to right). Notably, however, the inventory of new homes
where the builder has yet to break ground continues to climb, showing builders are
getting ready for what they believe will be more buyers. We think they’re
right. In fact, a lack of inventories is probably holding back sales. The other
piece of good news for builders is that new home prices are climbing, with the
median price of a new home up 6.3% from a year ago and average prices up 11.7%. In
other news on home prices, the FHFA index, a measure for homes financed by
conforming mortgages, was up 0.3% in February and is up 0.4% from a year ago, the
largest gain since 2006-07. The Case-Shiller index, which measures homes in the 20
largest metro areas around the country, increased 0.2% in February, the first gain
in ten months, but is still down 3.5% from a year ago. Twelve of 20 metro areas had
price increases, led by Phoenix. Atlanta had the largest decline. We expect the
Case-Shiller index to be up slightly for 2012. In manufacturing news this morning,
the Richmond Fed index, a measure of factory activity in the mid-Atlantic, increased
to +14 in April from +7 in March.

Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #218 on: May 16, 2012, 01:41:39 PM »

Data Watch
________________________________________
Housing starts rose 2.6% in April to 717,000 units at an annual rate, well above consensus To view this article, Click Here
Brian S. Wesbury - Chief Economist
Bob Stein, CFA - Senior Economist
Date: 5/16/2012
Housing starts rose 2.6% in April to 717,000 units at an annual rate, well above the 685,000 rate the consensus expected. Starts are up 29.9% versus a year ago.
The gain in starts in April was due to a 2.3% rise in single-family units and a 3.2% rise in multi-family units. Single-family starts are up 18.8% from a year ago, while multi-family starts are up 63.0%.
Starts rose in the South and Midwest, but declined in the Northeast and West.
New building permits fell 7.0% in April to a 715,000 annual rate, coming in below the consensus expected pace of 730,000. Compared to a year ago, permits for single-unit homes are up 18.5% while permits for multi-family units are up 35.6%.
Implications: The recovery in home building is definitely underway. Housing starts rose 2.6% in April to 717,000 units at an annual rate and are up 29.9% from a year ago. In addition, March housing starts were revised substantially higher from 654,000 to 699,000 units at an annual rate. The total number of homes under construction (started, but not yet finished) increased for the eighth straight month, the first time this has happened since 2004-05. Permits to build homes, although declining 7.0% in April, are up 23.7% from a year ago. Some people may see the April decline as a sign of weakness, but this weakness was all focused in multi-family permits which fell 20.8% in April after a 32.3% rise in March. Single-family permits actually rose 1.9% in April and are at the second highest level in two years, signaling continued gains in home building in the coming year. It looks like the second quarter of 2012 will be the fifth straight quarter where home building boosts real GDP. Multi-family activity – both starts and permits – has been leading the way and we expect that to continue, particularly now that a legal settlement means more foreclosures can move forward. Some people occupying homes they have not been paying for will now have to go elsewhere and rent. Based on population growth and “scrappage,” housing starts should eventually rise to about 1.5 million units per year (probably by 2016), which means the recovery in home building is still very young. For more on the housing market, please see our research report (link).
===========

here it is:

http://www.ftportfolios.com/Commentary/EconomicResearch/2011/11/2/housing-at-an-inflection-point
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #219 on: May 22, 2012, 01:36:43 PM »



Data Watch
________________________________________
Existing home sales rose 3.4% in April to an annual rate of 4.62 million To view this article, Click Here
Brian S. Wesbury - Chief Economist
Bob Stein, CFA - Senior Economist
Date: 5/22/2012
Existing home sales rose 3.4% in April to an annual rate of 4.62 million units; basically matching the consensus expected 4.61 million units. Sales are up 10.0% versus a year ago.
Sales in April were up in all four major regions. Most of the increase in overall sales was due to single-family homes. Multi-family sales also rose.
The median price of an existing home rose to $177,400 in April (not seasonally adjusted), and is up 10.1% versus a year ago. Average prices are up 7.4% versus last year.
The months’ supply of existing homes (how long it would take to sell the entire inventory at the current sales rate) rose to 6.6 in April. Although sales rose, the increase in inventories of homes for sale rose faster.
Implications: The housing recovery is definitely underway. Existing home sales rose 3.4% in April, and are up 10% from a year ago. The median price of an existing home is up 10.1% from a year ago, the largest yearly gain since January 2006. A big reason for this gain was fewer distressed sales and more sales of larger homes, a good sign for the economy moving forward. It still remains tough to buy a home. Despite record low mortgage rates, home buyers still face very tight credit conditions. Tight credit conditions would also explain why all-cash transactions accounted for 29 percent of purchases in April versus a traditional share of about 10 percent. Those with cash are able to take advantage of home prices that are extremely low relative to fundamentals (such as rents and replacement costs); for them, it’s a great time to buy. With credit conditions remaining tight, we don’t expect a huge increase in home sales any time soon, but the housing market is definitely on the mend. In other news today, the Richmond Fed index, which measures manufacturing activity in mid-Atlantic states, fell to +4 in May from +14 in April. The decline came in well below consensus expectations of +11.
Logged
DougMacG
Power User
***
Posts: 5944


« Reply #220 on: May 22, 2012, 07:50:35 PM »

"Housing starts rose 2.6% in April to 717,000 units at an annual rate, well above the 685,000 rate the consensus expected. Starts are up 29.9% versus a year ago."

Other than the previous years in this downturn and the deep recession years of 1981-1982, this is still the worst level of housing starts in more than 50 years!  http://www.nahb.org/generic.aspx?genericContentID=554  http://www.urbanfutures.com/reports/BTN%20US%20Housing%20Starts.pdf

Up 29.9% from 2011?  And that is still Fed-subsidized housing starts with interest rates close to zero.  Put another way, it would take a 300-400% to come back to ordinary levels of the last half century.

The good news is that with personal income at these levels, we don't need any more houses or house payments.

« Last Edit: May 23, 2012, 09:46:27 AM by DougMacG » Logged
DougMacG
Power User
***
Posts: 5944


« Reply #221 on: May 30, 2012, 12:24:32 PM »

Beating Wesbury to his positive spin take on this, keyword with continued downtrend is "surprising".

http://www.reuters.com/article/2012/05/30/usa-economy-idUSL1E8GU3I220120530

US pending homes sales post surprise fall in April

Wed May 30, 2012 11:12am EDT

* U.S. pending home sales fall 5.5 percent in April

* Mortgage applications drop 1.3 percent in latest week

By Jason Lange

WASHINGTON, May 30 (Reuters) - Contracts to purchase previously owned U.S. homes unexpectedly fell in April to a four-month low, undermining some of the recent optimism that the housing sector was touching bottom.

The National Association of Realtors said on Wednesday its Pending Home Sales Index, based on contracts signed last month, fell 5.5 percent to 95.5, its lowest level since December, after a downwardly revised 3.8 percent increase in March.
...
"The drop in pending home sales is clearly disappointing," said Pierre Ellis, an economist at Decision Economics in New York. "It remains to be seen whether this is the beginning of a real downturn."  - WHAT??
...
Wednesday's report showed contracts fell 12 percent in the western United States and 6.8 percent in the South. They edged lower in the Midwest and rose slightly in the Northeast.
...
The yield on 10-year U.S. Treasury notes sank to the lowest in 60 years.
--------
Housing is still roughly 100% subsidized by the Fed - what would interest rates and mortgage payments be if the Fed's job was to protect the value of the dollar?.  Other than that, where is the recovery??

Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #222 on: June 21, 2012, 01:53:31 PM »

Existing home sales fell 1.5% in May to an annual rate of 4.55 million units To view this article, Click Here
Brian S. Wesbury - Chief Economist
Bob Stein, CFA - Senior Economist
Date: 6/21/2012
Existing home sales fell 1.5% in May to an annual rate of 4.55 million units; basically matching the consensus expected 4.57 million units. Sales are up 9.6% versus a year ago.
Sales in May were down in the Northeast, West and South, but up in the Midwest. The fall in overall sales was due to declines in both single-family and multi-family home sales.
The median price of an existing home rose to $182,600 in May (not seasonally adjusted), and is up 7.9% versus a year ago. Average prices are up 6.4% versus last year.
The months’ supply of existing homes (how long it would take to sell the entire inventory at the current sales rate) rose to 6.6 in May. Although inventories fell, the overall pace of sales was slower, raising the months’ supply.
Implications: The housing recovery continues. Although existing home sales fell 1.5% in May, sales are still up 9.6% from a year ago. The median price of an existing home is up 7.9% from a year ago, the largest yearly gain since 2006 and the third consecutive month of year-to-year gains. Price gains were, at least in part, due to fewer distressed sales and more sales of larger homes, a good sign for the economy moving forward. It still remains tough to buy a home. Despite record low mortgage rates, home buyers still face very tight credit conditions. Tight credit conditions would also explain why all-cash transactions accounted for 28 percent of purchases in May versus a traditional share of about 10 percent. Those with cash are able to take advantage of home prices that are extremely low relative to fundamentals (such as rents and replacement costs); for them, it’s a great time to buy. With credit conditions remaining tight, we don’t expect a huge increase in home sales any time soon, but the housing market is definitely on the mend. In other housing news this morning, the FHFA index, a price measure for homes financed by conforming mortgages, was up 0.8% in April (seasonally-adjusted). Prices are up 2.4% in the past two months alone. This is the fastest 2-month gain anytime on record, going back to 1991, even including the housing boom! Today’s news on manufacturing was not as good. The Philadelphia Fed index fell to -16.6 in June from -5.8 in May. Some view this dip as a recession sign, but the Philly Fed Index fell to -20 in August 2011 and the Plow Horse Economy’s real GDP still grew at a 1.8% annual rate in that quarter, so it does not mean we’re in a recession. More likely, the report reflects concerns about Europe, rather than actual changes in activity. Meanwhile, new claims for unemployment insurance dipped 2,000 last week to 387,000 while continuing claims were unchanged at 3.30 million. These figures suggest tepid payroll growth in June: 45,000 nonfarm and 55,000 private. We think some firms are waiting for the health care ruling to decide how many workers to hire.
Logged
ccp
Power User
***
Posts: 4083


« Reply #223 on: June 21, 2012, 01:56:01 PM »

30 yr now @ 3.66% - lowest on record!

Logged
DougMacG
Power User
***
Posts: 5944


« Reply #224 on: June 21, 2012, 03:05:13 PM »

What would be the value of housing if not still subsidized by government?Significantly lower. Housing is distorted by govt - but tied to income. Housing can't recover until employment and personal income recovers.
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #225 on: June 24, 2012, 05:36:27 PM »

http://www.nytimes.com/2012/06/24/movies/the-queen-of-versailles-and-its-lawsuit.html
June 21, 2012
House of Cards
By JOE NOCERA

 
David and Jackie Siegel and their Orlando, Fla., dream home are the subjects of “The Queen of Versailles,” a film by Lauren Greenfield
“THIS won’t be a big part of my story,” I assured Lauren Greenfield. “But can you tell me a little bit about the lawsuit?”
It was the usual prerelease scene: a reporter and a filmmaker, sitting in a Midtown restaurant, talking about her forthcoming movie. Known primarily as a photographer, Ms. Greenfield, 45, had spent much of the last three years shooting and editing “The Queen of Versailles,” a documentary whose boilerplate description — a wealthy Florida couple tries to build America’s largest house in Orlando — doesn’t do justice to the jaw-dropping scenes of consumption and comeuppance that, writ large, strangely mirror the fortunes of less extravagant Americans. With her movie set for release on July 20, the time had come for Ms. Greenfield to promote it.
Most of the interview revolved around the film and, more broadly, Ms. Greenfield’s approach to both filmmaking and photography. Her photography, she said, was “sociologically themed,” with an emphasis on consumerism and cultural values. “The Queen of Versailles,” she added, was very much of a piece with her body of work: “What drew me to this subject was that I got interested in the idea of a house as the ultimate expression of the American Dream.” She said she hoped that audiences would see the film not so much as a case study in how the wealthy live but rather as a metaphor for how we all lived — and thought, and acted — during the giddy years of the housing bubble, and the painful ones that followed.
Ms. Greenfield raved about Jackie and David Siegel, the couple at the center of the movie. Jackie, a 46-year-old former model, is 31 years younger than David, the billionaire founder of Westgate Resorts, “the largest privately owned time-share company in the world,” as he says in the movie. They have eight children (including a niece of Jackie’s, whom they are raising), four dogs and, despite their wealth, very little pretension.
“One of the things that appealed to me about Jackie and David is that because they come from humble origins, they had a generosity of spirit that allowed me to get to know them,” Ms. Greenfield said.
Every few months Ms. Greenfield and her small crew would essentially move in for a few days, doing interviews and playing fly on the wall. She came to like Jackie very much, and to respect David.
So it was more than a little painful when, on the eve of the film’s premiere at the Sundance Film Festival in January — an event Mrs. Siegel attended — David Siegel sued Ms. Greenfield for defamation. His original complaint focused on the Sundance publicity materials, which inaccurately described his company as collapsing. But even after Ms. Greenfield and Sundance tweaked the language, Mr. Siegel didn’t drop the lawsuit. Instead he filed a broader complaint, alleging that “The Queen of Versailles” depicts Westgate Resorts “in an array of defamatory, derogatory and damaging ways.”
When I asked Ms. Greenfield about the lawsuit, she reiterated her fondness for her subjects, and then let out a small sigh. “You should probably talk to our lawyer about the details,” she said.
THE OPENING SCENES give no hint that “The Queen of Versailles” will have any message other than F. Scott Fitzgerald’s: The rich are different from you and me. While their 90,000-square-foot dream house is under construction, the Siegels make do with a 26,000-square-foot home. They employ a staff of 19. Opening her closet, Mrs. Siegel exclaims happily, “I have a $17,000 pair of Gucci crocodile boots.”
The source of the family’s wealth is Mr. Siegel’s time-share company, which operates more than two dozen resorts around the country and which, to be brutally honest, has much in common with the subprime mortgage industry, selling people vacation time shares many can’t really afford. Mr. Siegel has just completed his greatest resort yet, a 52-story property in Las Vegas called the PH Towers Westgate, in which he has invested more than $400 million of his own money.
As for Versailles — and yes, that’s what the Siegels call the enormous home they are building — it is half-finished when the movie opens. With the camera tagging along, Mrs. Siegel takes a friend on a tour. “Is this your room?” the friend asks as they walk toward a cavernous space. “It’s my closet,” she replies. She and her husband explain to Ms. Greenfield that they didn’t set out to build America’s biggest house, but after they’d included everything they both wanted — the bowling alley, the 10 kitchens, the health spa — it just turned out that way.
What then happens to the Siegels — and what gives the film its tension — is what happened to so many Americans: the housing bubble burst. Westgate Resorts is forced to lay off thousands of employees. Mr. Siegel has to halt construction on Versailles and put it on the market. Four months after PH Towers opens, the film notes ominously, the company that built it “sues Westgate for unpaid bills.”
So instead of being a movie about the building of a giant house, “The Queen of Versailles” instead focuses on the drip, drip, drip of a rich family trying to hold onto what it has — and its painful, sometimes comical, adjustment to changing circumstances. All but four of the household staff are laid off, and the Siegel home descends into a state of chronic, mild chaos. Ms. Greenfield lingers on the dog poop scattered around the house. (The dogs were never trained, she says, because the staff always quickly swept up after them.)
Ultimately the real plot revolves around Mr. Siegel’s desperate struggle to to keep the banks from taking over PH Towers, in which he has so much invested, both financially and psychologically. On Ms. Greenfield’s last visit she films him sitting on a couch, the TV on, surrounded by documents, barking at his family and sounding deeply depressed.
Even though the Siegels live in a different financial stratosphere from most Americans, Ms. Greenfield’s metaphorical conceit works: Mr. Siegel’s struggle to hold onto his resort — and his dream house — differs only in scale from the struggles of millions of Americans faced with foreclosure. People get depressed when they are about to lose something they care about. They lash out at the banks. They talk about changing their behavior. In one tragicomic scene Mrs. Siegel does her Christmas shopping at Walmart — but then overcompensates by practically buying the place out.
When I first interviewed Ms. Greenfield, that is mostly what we talked about, and, indeed, it is what I planned to write about. But then on a lark I called Mr. Siegel’s lawyer, who sent me the amended complaint. It is less a legal brief than the cri de coeur of a wounded man. I suddenly realized why Mr. Siegel was suing: An extremely wealthy man used to getting his way, he thought he was in control of Ms. Greenfield’s narrative. He assumed it would be a narrative of business success, which is how he views his life story. But when he saw Ms. Greenfield’s film, he realized that her narrative was a story of failure. He felt betrayed.
I also realized that despite what I’d said to Ms. Greenfield, I was suddenly more interested in this supposed betrayal than in the film I had been assigned to write about. I have to admit: I felt a little badly about it. But not that badly.
DAVID SIEGEL’S LAWSUIT claims that “The Queen of Versailles” is a fraud — “more fictional than real,” it charges, describing the film as a “a staged theatrical production, albeit using nonprofessionals in the starring roles (as themselves).” What he means is that what we see on screen — dramatic though it surely is, and metaphorical as we are likely to view it — is less a reflection of reality than a stringing together of out-of-context scenes designed to provide Ms. Greenfield her narrative arc.
He’s got a point. Take, for instance, those scenes in which the Siegels flaunt their wealth. Although they plainly give the impression of being shot before the start of the financial crisis, they were actually filmed a year later, as Ms. Greenfield acknowledged in an e-mail. Although it appears the Westgate layoffs took place long afterward, they had mostly occurred before she began filming. And that happy scene in which Mrs. Siegel gives the Versailles tour? It suddenly occurred to me that there wasn’t a hammer in sight. Construction, it turns out, had already halted.
These particular illusions didn’t bother Mr. Siegel in the least. They were the illusions he thought Ms. Greenfield had bought into. Rather, what drove him around the bend was the way the film ended: with the clear impression he was in a host of trouble. He insists that despite the PH Towers’ woes, that was never remotely true.
Ms. Greenfield makes no apologies. “The movie ends on Nov. 21, 2011, when he loses possession of the Towers,” she said. That is certainly an understandable choice. The Siegels’ seeming rise and fall is what propels “The Queen of Versailles.”
“David Siegel feels that since the film was made he is back on top,” Ms. Greenfield’s lawyer, Martin Garbus, said when I spoke to him. “He wants the film to end with music from Wagner and him coming out of the clouds. He would like a different film from the one she made.”
Mr. Garbus said he felt Mr. Siegel had virtually no chance of winning — not only is the First Amendment a stumbling block, but the Siegels agreed in writing to use arbitration to settle any dispute with Ms. Greenfield. I suspect that Mr. Siegel, who like many wealthy men, files lawsuits the way other people honk their horns, is smart enough to know that. But one also suspects that winning isn’t really the point. A lawsuit can cost his new foe money and cause her trouble — and it can hurt her feelings too, because she so clearly wants the Siegels to like the film, and to like her.
When I called Mr. Siegel, he at first said he couldn’t talk because of the litigation. But he couldn’t help himself — just as he probably couldn’t help himself when Ms. Greenfield’s cameras were rolling. “It was supposed to be a movie about building the largest house in America,” he groused. But it wasn’t, and he only had himself to blame “for letting these people intrude into my life.”
He had complaints large and small. His dogs didn’t regularly poop in the house, he said. (One of them was dying of cancer, he said, which caused the problem.) “She shows an empty call center where people have been laid off — right next door there was a full one, which she didn’t film,” he grumbled. Ms. Greenfield filmed his wife in a stretch limousine, getting lunch from McDonald’s. Mr. Siegel said that the filmmaker suggested his wife rent the limo. And that scene where he seems depressed? “It had nothing to do with the business,” he said. “I was depressed because I was sick of them showing up.”
Suddenly he had another complaint: “You’re as bad as she is,” he said to me. “You roped me into giving this interview.”
Before hanging up, he reiterated that Westgate Resorts was as profitable as it had ever been, and that Versailles, which he had never lost, was back under construction. “We didn’t hit bottom,” he insisted. “We just flattened out.”
When I repeated Mr. Siegel’s allegations to Ms. Greenfield, she swatted away most of them with ease. But she did acknowledge that on that last visit he was indeed agitating for the film crew to leave. She did not deny that his seeming depression was because she was still filming.
“We tried to capture that in our last interview,” she said.
Before we got off the phone, she too had one last thing to say. “I’m worried that the focus on this lawsuit is going to detract from the film.”
I didn’t miss a beat. “Don’t worry,” I replied. “I liked the film. I’m sure that will come through.”
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #226 on: June 25, 2012, 04:28:03 PM »

New single-family home sales increased 7.6% in May To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 6/25/2012
New single-family home sales increased 7.6% in May, to a 369,000 annual rate, easily beating the consensus expected pace of 347,000.
Sales were up in the Northeast and South, but down in the Midwest and West.
 
The months’ supply of new homes (how long it would take to sell the homes in inventory) fell to 4.7 from 5.0 in April.  The fall in the months’ supply was all due to a faster selling pace. Inventories rose slightly.
 
The median price of new homes sold was $234,500 in May, up 5.6% from a year ago.  The average price of new homes sold was $273,900, up 4.3% versus last year.
 
Implications:  The market for new homes should be the last piece of the housing puzzle to recover and even that is now on the mend. New home sales easily beat consensus expectations, coming in at a 369,000 annual rate in May and are now up 19.8% from a year ago.  The median price of a new home sold is up 5.6% versus a year ago. Although the inventory of homes rose slightly, the increase was due to the inventory of homes not yet started as well as homes still under construction; the inventory of completed new homes fell again, to the lowest level on record (dating back to 1963). The months’ supply of new homes, is now 4.7. This is below the average of 5.7 over the past 20 years and not much above the 4.0 months that prevailed in 1998-2004, during the housing boom. The lack of availability of completed new homes is likely holding back sales, which will improve even more as builders finish some of the homes now under construction. We see the same phenomenon in the existing home market, where a lack of homes on the MLS is temporarily holding back sales (see the most recent Wesbury 101).  The road ahead looks better than it has in years.  Look for housing to continue to move higher, and to add to GDP for the fifth consecutive quarter.
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #227 on: July 01, 2012, 03:29:12 PM »




http://www.businessweek.com/news/2012-06-28/fha-underestimates-mortgage-delinquency-rates-study-says


FHA Underestimates Mortgage Delinquency Rates, Study Says

More than 40 percent of the U.S. Federal Housing Administration loans originated from 2007 through 2009 will be delinquent within five years and the agency’s data underestimate that risk, according to a study by the Federal Reserve Bank of New York and New York University.
The research published today used loan information from data provider CoreLogic Inc. (CLGX) (CLGX) to track FHA-insured mortgages and predict default rates based on borrower characteristics.
The FHA, part of the Department of Housing and Urban Development, underestimates risk because it counts refinanced mortgages as successful loan terminations, even though the same borrowers are refinancing into new mortgages backed by the government insurer, according to the paper published on the website of the National Bureau of Economic Research. The researchers computed the risk of default by linking all of the loans connected to each borrower.
“Having such a very large fraction of the people who borrow from you become delinquent could never be regarded as good public policy,” said Andrew Caplin, a professor of economics at New York University and one of the study’s authors.
The study is the latest in a series of critiques by Caplin and others of the way the FHA tracks its financial health. The agency, which took on more loans as private insurers left the market in the aftermath of the 2008 financial crisis, guarantees about $1.1 trillion in home loans.
HUD spokeswoman Tiffany Thomas Smith declined to comment in detail because the agency has not yet reviewed the study. The FHA has defended its financial performance data and stressed that the quality of its loans is improving.
‘Credit Quality’
“Credit quality of loans the agency has insured over the past two years is the highest it has ever been,” the agency said in a fact sheet posted on its website in March. “Early- payment default rates and current-period serious delinquency rates are a fraction of those seen in earlier books at the same point in their seasoning.”
Caplin said he is urging the agency to change its model for computing default risk.
“In the current method, we’re not building a future,” he said. “If you can’t even look at the data right, how can you possibly design the housing-finance institutions of the future?”
To contact the reporter on this story: Clea Benson in Washington at cbenson20@bloomberg.net or
To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #228 on: July 01, 2012, 03:30:56 PM »

Second post, perhaps related to the first wink


http://www.cnbc.com/id/47736043
FHA Turns to Investors as Losses Continue to Rise

Faced with a rising number of severely delinquent loans, the Federal Housing Administration is taking a very small program to sell these loans to investors and ramping it way up.
The government's mortgage insurer came to the rescue of the mortgage market, when credit seized up at the start of the recent housing crash.
It's market share rose from barely 3 percent to upwards of 40 percent of new originations. Now it is saddled with over 700,000 bad loans, or 9 percent of the residential loans it insures.
"I'm not going to make any future predictions "bailouts", but we are working hard every day to ensure that we are protecting the taxpayers and the FHA," said FHA Acting Commissioner Carol Galante.
The initial pilot program was launched in 2010 and sold barely 3000 loans in all of last year. The newly renamed Distressed Asset Stabilization Program, will offer up to 5000 loans per quarter starting this fall. Borrowers must be at least six months behind on their payments for the loan to be eligible.
"If we can sell the mortgage sooner, we have the opportunity to do at least as good in terms of money back to FHA and potentially help the borrower, and the community," said Galante.
Since the FHA does not own, but insures mortgages, this would be a voluntary choice by the banks, but likely a popular one, as the FHA requires banks to go fully through the costly and time-consuming foreclosure process before handing off the properties to the FHA.
FHA also limits the types of modifications the banks can do. Big banks have already starting selling off some of their non-FHA other mortgages to private investors, like Connecticut-based Carrington Mortgage Holdings.
"If an investor has correctly analyzed and priced the NPL(non-performing loans) pools, and has the people, services and infrastructure in place to work with borrowers and manage the properties, these pools can be a very attractive investment," says Rick Sharga, a Carrington executive.
Investors in these pools, however, will face restrictions. They cannot foreclose on the property for six months after purchasing the loan, and they must guarantee that at least half the loans would be modified to a reperforming status and held for at least three years. That is designed to prevent immediate "flipping."
"We have a fairly straightforward approach to how we handle NPL (non-performing loan) pools. We attempt to keep the borrower in the home and keep the property cash flowing. In the long run, that should deliver the best results for our investors," says Sharga.
Investors are buying the loans at a discount and therefore can make more aggressive modifications than the banks might be willing to do. For the FHA, selling the loans, even at this discount, is stemming at least some of the bleeding simply by getting rid of them more quickly.
"We actually save money because we're not paying all the cost of holding that mortgage all the way through to foreclosure and managing and maintaining those properties over a long period of time," said Galante.
The program will offer some national loan pools and some pools in "hardest hit geographies," according to Galante. Those geographically specific pools will have additional restrictions in terms of how many of those properties could come to market as vacant REO (real estate owned, foreclosed homes).
FHA is not offering up all of its troubled loans for sale, because as the housing market improves, they are able to get increasingly better returns when selling the foreclosed homes it has.
"We're seeing our recovery dollars go up in some markets," adds Galante. "We have to have multiple tools.

Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #229 on: July 02, 2012, 12:11:52 PM »

from our friend Pat:

======================

But don't forget to blame the FHA for their actions.  Those of us in the industry knew that the FHA loans being done were nothing more than Subprime all over again.
•   At this time, about 10% of all FHA loans are delinquent over 90 days.
•   16% of all FHA loans are at least 30 days delinquent.
•   FHA has a minimum down payment requirement of 3.5%.  3% of this can be made by the seller "crediting" a portion of their "purchase price" towards the down payment.  In other words, the sales price is increased by 3% to cover most of the down payment, same as subprime.  Of all 2010 FHA loans done using the 3.5% down payment, the loans are now on average 7% underwater.
•   Of all FHA loans that get modified, 49% are again delinquent after 12 months.
•   40% of FHA buyers are first time homeowners, with a greater risk of default.
•   About 26 percent of the FHA-insured loans originated in 2007 are seriously delinquent, meaning overdue by 90 days or in foreclosure, according to a March 26 FHA report to Congress.
•   For 2008 mortgages, the share is 24 percent.
•   For 2009, the rate is 11 percent, for loans originated in 2010 it is 4.1 percent, and
•   For 2011, it’s 1 percent.
•   In September 2011, 638,000 FHA mortgages were in their second default, the agency said in a November report to Congress
•   FHA in 2010 began mandating credit scores of at least 580 for borrowers who use its minimum down payment --which was raised to 3.5 percent from 3 percent in 2009.
•   Buyers can cite income from future roommates to qualify for a loan.
•   Cash reserves, required by Fannie Mae and Freddie Mac to show a borrower’s ability to pay a mortgage if a hot water tank bursts or if the roof leaks, aren’t required for many FHA loans.
•   FHA loans are 35-40% of all current home sales.
•   FHA loans are claimed to require 45% debt ratios, which are far to high.  But, I have personally seen approvals in 2010 at 55% debt ratios.
So, when many people claim that housing is recovering, they are simply quoting "raw data" without looking at the underlying causes and problems. 
Once again, the government is trying to prop up the housing market with unsustainable programs.
Pat
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #230 on: July 14, 2012, 11:34:24 AM »

Patrick comments:  I am no fan of Yves Smith, but this time, she has gotten it right.  This is one of the reasons why Housing appears to be recovering, but in fact is being manipulated.

==========================

http://www.nakedcapitalism.com/2012/07/realtytrac-corelogic-confirm-housing-bear-thesis-85-90-of-reo-being-held-off-market-meaning-tight-inventories-are-bogus.html

RealtyTrac, CoreLogic Confirm Housing Bear Thesis: 85-90% of REO Being Held Off Market, Meaning “Tight” Inventories Are Bogus



We’ve been mystified with the housing bull argument that things really are getting better. While real estate is always and ever local, and some markets may indeed be on the upswing, there are ample reasons to doubt the idea that an overall housing recovery is in. For instance, the recent FHFA inspector general report stated:

    Further, general distress in the housing sector will likely continue to result in elevated REO inventories. For example, the Enterprises’ financial data indicate that, as of the end of 2011, more than 1.1 million mortgages held or guaranteed by the Enterprises were “seriously delinquent,” i.e., were 90 or more days past due. At that time, the volume of seriously delinquent mortgages was more than six times the size of the Enterprises’ REO inventories

Reader MBS Guy noted:

    My rough calculation of their REO and delinquency numbers would indicate that they will have about 300,000 new REOs (acquisitions, in their parlance) per year for the next three years, assuming their isn’t a surge in new defaulters from their portfolio (ie – just using the loans currently seriously delinquent). They also report 179,000 properties currently in REO (end of 2011).

    If they maintain their 2011 rate of REO dispositions at 353,000, the pipeline would be largely cleared in about 3 years. If they are able to increase the pace a bit, perhaps the inventory clears in 2-2.5 years.

    Either way, it is very likely that about 1 million REO properties will be disposed of by the GSEs over the next 2-3 years. Over the last 3 years, they have disposed of about 833,216 REOs.

    What will the impact on home prices be in the rate of REO disposition in the next 3 years matches or exceeds the rate of disposition of the last 3 years? I’d expect that it will be pretty negative.

Remember, that’s ONLY Fannie and Freddie mortgages. Recall that 1.1 million figure, serious delinquencies in their portfolios. Top housing analyst Laurie Goodman puts the total across the market at 2.8 million.

So why are we seeing so much housing cheerleading? One big “proof” is that housing inventories are supposedly shrinking. If you recall the classic supply/demand chart, if a price is higher than the market price, you expect to see big inventories somewhere. Conversely, if inventories are falling below a “normal” level (there are always some buffers in a system), that’s a sign of strengthening demand.

 

But we’ve seen so much evidence that the inventories that the commentators are looking at are misleading it isn’t funny. Banks were attenuating foreclosures even before the robosigning scandal broke. In the states with real housing distress, banks will take foreclosures up to the stage of actually taking title from the owner, and let it sit in limbo for a protracted period. But in addition to delays in real estate being taken into REO, there is also evidence of banks simply not putting real estate owned by securitizations, the GSEs, or the banks themselves, on the market, thus keeping it out of visible inventories. For instance, numerous NC readers report they see vacant homes, want to make an offer, and can’t find out who to contact to do so. That is a pretty strong sign that those homes are also not in official REO inventories.

And let’s consider the implications of that chart, again: if there ARE large inventories, that’s means supply is being constrained and the resulting “market” prices are above where they’d be based on fundamentals. So any price improvement is based not on improving conditions, but the manipulation of supply.

We finally have some official confirmation of our thesis. From AOL’s Real Estate blog, “‘Shadow REO’: As Many as 90% of Foreclosed Properties Held Off the Market, Estimates Suggest“:

    As many as 90 percent of REOs are withheld from sale, according to estimates recently provided to AOL Real Estate by two analytics firms. It’s a testament to lenders’ fears that flooding the market with foreclosed homes could wreak havoc on their balance sheets and present a danger to the housing market as a whole.

    Online foreclosure marketplace RealtyTrac recently found that just 15 percent of REOs in the Washington, D.C., area were for sale, a statistic that is representative of nationwide numbers, the company said.

    Analytics firm CoreLogic provided an even lower estimate, suggesting that just 10 percent of all REOs in the country are listed by their owners, which include mortgage giants Fannie Mae and Freddie Mac as well as the Federal Housing Administration. As of April 2012, 390,000 repossessed homes sat in limbo, while about 39,000 were actually listed for sale, said Sam Khater, senior economist at CoreLogic.

    Daren Blomquist, vice president of RealtyTrac, said that he was surprised by his company’s finding, especially since a similar analysis in 2009 found that banks were attempting to sell nearly twice as much of their REO inventory back then.

And the article presents the obvious conclusion, that keeping homes off the market is leading to higher prices than you’d see if they were put up for sale:

    In fact, if lenders turn their REO release valve to full blast, the deluge of foreclosures cascading onto the market could plunge the country into a recession, said Thomas Martin, president of consumer advocacy group Americas Watchdog.

    “If they let the dam essentially break. It could be a catastrophic disaster for the U.S. economy,” he said, predicting that some major banks would fail and home prices would nosedive by 20 percent.

    That doomsday scenario has many industry professionals supporting lenders’ tactics of holding onto most of their REOs. Otherwise, they would be “causing the floor to fall out from underneath the entire market,” Faranda said. He added that banks don’t have the manpower to push the paperwork required to put all their foreclosures on the market.

Of course, the discussion focuses on how much price manipulation is justified, as opposed to the real problem: we have had, and continue to have, far too many foreclosures and far too few mortgage modifications. But the solution seems to be to zombify the housing market rather than make servicers change their ways.
« Last Edit: July 14, 2012, 12:09:28 PM by Crafty_Dog » Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #231 on: July 14, 2012, 02:07:54 PM »



The chart in this article is completely bogus—whoever created it is not well trained in economics. Nobody can set the "price" of houses above a market clearing level, not when there are transactions taking place. There is plenty of evidence that the current price level of homes is a market clearing price. Now, there may indeed be a lot of REO that is being kept off the market. If so,that has the effect of shifting the supply curve to the left. If the demand curve is unchanged, that results in a higher market clearing price than you would see if REO was not being withheld. But what is completely ignored here is that the demand curve has shifted to the left as well; there are just tons of people who have shied away from the housing market because they fear a further price decline. It's even possible that the demand curve has shifted more to the left than the supply curve, and that explains why prices have declined so much.

In any event, what happens if more REO gets dumped on the market (because banks sense that the market is firming up and they want to dump their excess inventory of homes) at the same time that the supply curve shifts to the right (because people begin to sense that we've seen a bottom in housing)? Both curves can shift to the right without causing any reduction in price. It may even be the case that REO sales could fail to satisfy the increase in demand, resulting in higher prices even as REO is dumped on the market. Don't ignore the fact that the huge reduction in new housing starts has had the effect of greatly reducing the supply of houses.


Scott Grannis
http://scottgrannis.blogspot.com
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #232 on: July 14, 2012, 05:03:14 PM »

The first voice in the conversation:
===============
This market is being manipulated in many in many different markets, to keep inventory down and prices up.  That is why there is not only a tremendous REO inventory withheld from market, but also why lenders are not foreclosing and adding to more inventory.

People are not buying for many reasons as I have outlined previous.  Most of the people who are renters cannot  realistically afford the homes, or they have  lost homes and are now credit impaired.  Those might go FHA, but look at the default rates for FHA.  And they are going up.

There are over 6m homes that are 30 days late or more.  Of them, 90% will default and end up in foreclosure.  Modifications?  LOL!!!  40% fail in the first year. 

Lower housing starts reduce inventory?  Well, from one aspect, yes.  But, since there were 2.5m overbuilt units, it will take a long time to clear.  (Per Laurie Goodman from Amherst Securities.)

Also, look at new family unit formations.  Those are just barely above housing starts, so that will effectively eliminate inventory reduction until such family units begin again.

Don't forget the Baby Boomers and Pre Baby Boomers. Death rates are going up, so that will add to inventory.  Factor in that from the Census Bureau data I posted previously that there are not enough replacement buyers for those who die, and what is going to happen?

And, don't forget the moveup buyer. This market is virtually non-existent. 52% total are in near equity or negative equity positions, so they can't sell and move up.  Hence Boomers cannot downsize.  (Near equity for me is a position whereby the seller must pay the 6% commission, 3% new loan for home costs, and 10% down payment.  That means current LTV can be no greater than 81%.  Good luck on many people meeting that standard.)

This stuff cannot be looked at one dimensionally. All factors must be considered and incorporated into a complete picture.  It all plays a part.

BTW, I talk with banks on a routine basis, and I talk with top heads of Corelogic at least weekly, and have a meeting with them on the 24th.  Privately, they admit that we are fucked for years.
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #233 on: July 18, 2012, 10:15:52 AM »

From Patrick:


http://www.zerohedge.com/news/so-much-housing-has-bottomed-shadow-housing-inventory-resumes-upward-climb

So Much For "Housing Has Bottomed" - Shadow Housing Inventory Resumes Upward Climb

Appropriately coming just after today's Housing Starts data, which captured MSM headlines will blast was "the highest since 2008" is the following chart from this morning's Bloomberg Brief, which shows precisely the reason why "housing has bottomed" - and it has nothing to do with organic demand rising. No, it has everything with excess inventory once again starting to pile up, which means that the imbalance in the supply and demand curves is purely a function of shadow inventory being stocked away, and that there is once again no true clearing price.
From Bloomberg:
The shadow inventory of homes – those in foreclosure plus those 90 days late on mortgage payments – is on the rise again, a further indication that the supply side has not yet healed. Accoring to RealtyTrac, foreclosure starts jumped 6 percent on a year ago basis in the second quarter, the first year-over-year increase since 2009. There are roughly 4.16 million homes that could begin to flow to market.
 
Once one takes the number of homeowners 30- to 90-days late on their mortgage payments and includes the likely default of those that have negative equity on their homes, there is a strong possibility more than 6.5 million additional foreclosures will enter the pipeline. The  addition of homes that banks may be holding back suggests a much larger number. Laurie Goodman of Amherst Securities Group has testified before Congress that it could be as high as between 8 and 10 million.
 
And scene.

Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #234 on: July 18, 2012, 10:22:26 AM »



Zero Hedge's endorsement is not exactly a badge of honor. They are the best-known perma-bears in the financial blogosphere.

Scott Grannis
http://scottgrannis.blogspot.com
Logged
DougMacG
Power User
***
Posts: 5944


« Reply #235 on: July 26, 2012, 03:17:47 PM »

"Sales of new U.S. homes unexpectedly dropped in June from a two-year high..."

"Unexpectedly", lol.

http://www.bloomberg.com/news/2012-07-25/sales-of-new-u-s-homes-unexpectedly-fall-from-two-year-high.html

Employment is down, incomes are down, wealth is down,growth is down, confidence is down, 62% say we are on the wrong track, why wouldn't new home sales be down?

Who buys the new homes that drive home construction employment, the lowest income quintile?
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #236 on: August 24, 2012, 10:44:44 AM »


http://housingwire.com/news/household-formation-among-young-adults-shows-no-sign-recovery-0


  Household formation among young adults shows no sign of recovery

The rate at which Americans formed households fell sharply during the
Great Recession, with the greatest shortfall among young adults squeezed
financially by the weak economy, according to an economic commentary
from a Cleveland Federal Reserve official.

Tighter lending standards are further complicating the housing sector's
ability to recover by reducing access to mortgage credit, the commentary
said.

"This may have increased the incentive of individuals to delay household
formation in order to save for a down payment, build credit histories,
or repair tarnished credit scores," said Tim Dunne, a researcher at the
Federal Reserve Bank of Cleveland, who wrote the commentary.

Although household formation has recently picked up, it's not fast
enough to make up for the shortfall that occurred over the last several
years, he said.

The analysis shows the biggest dropoff in household formation occurred
among adults aged 18 to 34.

An additional 2 million younger adults now live in a household headed by
their parents, than did before the recession. Although these younger
adults make up a relatively small portion of household heads, they
account for almost three-quarters of the overall shortfall in household
formation.

Choice of housing has shifted, as well, for younger adults. Prior to the
recession, about one-third of individuals aged 18-34 headed households,
with roughly 40% of them in their own homes. In 2010, young adults'
homeownership rate declined to 35.5%. This shift into rental housing
continued into 2011 and early 2012, with little sign of any abatement.

The shortfall in household formation observed over the 2007--2010 period
is an outgrowth of the weak economy and should rebound further as
individuals who delayed forming households during the recession and
initial recovery set out on their own, Dunne said.

Still, he concludes that the sharp decline in home ownership rates for
younger adults shows little sign of recovering in the near term. When
young adults start forming more households, it may have a stronger
impact on the demand for rental properties than owner-occupied housing,
Dunne said.

Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #237 on: August 29, 2012, 08:19:31 AM »

http://mhanson.com/archives/1027?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+MarkHansonAdvisers+%28Mark+Hanson+Advisors%29
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #238 on: September 19, 2012, 04:49:53 PM »

Existing Home Sales Rose 7.8% in August to an Annual Rate of 4.82 Million Units To view this article, Click Here
Brian S. Wesbury - Chief Economist
Bob Stein, CFA - Senior Economist
Date: 9/19/2012
Existing home sales rose 7.8% in August to an annual rate of 4.82 million units, coming in way above the consensus expected 4.56 million. Sales are up 9.3% versus a year ago.
Sales in August were up in all major areas of the country. The rise in sales was due to increases in both single-family and multi-family home sales.
The median price of an existing home fell slightly to $187,400 in August (not seasonally adjusted), but is up 9.5% versus a year ago. Average prices are up 4.3% versus last year.
The months’ supply of existing homes (how long it would take to sell the entire inventory at the current sales rate) fell to 6.1 in August from 6.4 in July. The decline in the months’ supply was all due to a faster selling pace. Inventories rose in August.
Implications: There should be no doubt the housing market is in recovery. Existing home sales boomed in August rising 7.8%, coming in at the highest levels since mid-2010, when sales were artificially high due to the homebuyer tax credit. Some of the gain in August might be due to seasonal adjustment issues: sales also spiked higher in August 2010 and August 2011. However, sales are still up 9.3% from a year ago while home prices are up 9.5%. Higher sales and prices might be luring some sellers back into the market. The inventory of existing homes rose to 2.47 million in August from 2.40 million in July. Still, inventories are down 18.2% from a year ago and the months’ supply of homes (how long it would take to sell the entire inventory at the current selling rate) fell to 6.1. Just a year ago, the months’ supply was 8.2. A couple of factors explain the rise in existing home prices. First, the lack of inventory on the market is pushing up prices while demand is picking up for housing. Second, fewer distressed sales and more sales of larger homes. In general, it still remains tough to buy a home. Despite record low mortgage rates, home buyers face very tight credit conditions. Tight credit conditions would also explain why all-cash transactions accounted for 27 percent of purchases in August versus a traditional share of about 10 percent. Those with cash are able to take advantage of home prices that are extremely low relative to fundamentals (such as rents and replacement costs); for them, it’s a great time to buy. With credit conditions remaining tight, we don’t expect a huge increase in home sales any time soon, but the housing market is definitely on the mend. Other recent economic news has been mixed. The NAHB index, which measures confidence among homebuilders, rose to 40 in September from 37 in August, the highest level since 2006. Meanwhile, the Empire State index, which measures the direction of manufacturing activity in New York, fell to -10.4 in September from -5.9 in August, the lowest level since the recession ended in 2009.
===========
Housing Starts Rose 2.3% in August to 750,000 Units at an Annual Rate To view this article, Click Here
Brian S. Wesbury - Chief Economist
Bob Stein, CFA - Senior Economist
Date: 9/19/2012
Housing starts rose 2.3% in August to 750,000 units at an annual rate, coming in below the 767,000 rate the consensus expected. Starts are up 29.1% versus a year ago.
The rise in starts in August was all due to a 5.5% increase in single-family homes. Multi-family units declined 4.9%. Single-family starts are up 26.8% from a year ago, while multi-family starts are up 35.2%.
Starts rose in the Midwest and South, but fell in the Northeast and West.
New building permits fell 1.0% in August to an 803,000 annual rate, still beating the consensus expected pace of 796,000. Compared to a year ago, permits for single-unit homes are up 19.3% while permits for multi-family units are up 34.7%.
Implications: Home building continued to recover in August. Although housing starts came in less than the consensus expected, they were still up 2.3% in August and up 29.1% from a year ago. The gain in August was all due to a 5.5% rise in single-family starts; multi-family starts, which are very volatile from month to month and which increased rapidly earlier in the summer, declined 4.9%. As the top chart to the right shows, both single-family and multi-family housing starts are trending higher. Although permits to build homes fell 1% in August, they still beat consensus expectations and are up substantially in the past year, 19.3% for single-family homes and 34.7% for multi-family units. The total number of homes under construction (started, but not yet finished) increased for the 12th straight month, the first time this has happened since back during the building boom in 2003-2004. Based on population growth and “scrappage,” housing starts will eventually rise to about 1.5 million units per year (probably by 2016), which means the recovery in home building is still very young. Don’t expect a straight line recovery, there will be zigs and zags along the way, but the overall trend will continue to push higher. For a little more on housing, please see an interview this morning on Bloomberg TV here.
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #239 on: September 24, 2012, 12:03:50 PM »

Monday Morning Outlook
________________________________________
Housing Recovery Still Young To view this article, Click Here
Brian S. Wesbury - Chief Economist
Bob Stein, CFA - Senior Economist
Date: 9/24/2012

The turnaround in the housing market is perhaps the brightest spot in an otherwise tepid economic recovery.

Home sales, home building, and even home prices are all headed up. In the past twelve months, sales of existing homes are up 9% while sales of new homes are up 25%. Housing starts are up 29%. The two most prominent home price measures, Case-Shiller and FHFA, are both up at about a 7% annual rate in the past six months.
This is not a dead cat bounce. As we pointed out almost a year ago, the US was at an upward inflection point where fundamentals would help propel the housing market into a recovery. (click here to view last year’s piece). Now, we think the stage is set for more advances over the next few years.

The number of existing homes for sale is down to the same level as 2003-04. Meanwhile, the US population has grown 8% and the homeownership rate is lower. In other words, with so many potential buyers and relatively few homes, we now have a shortage of homes on the MLS. The market for new homes is even more extreme, with fewer new homes for sale than at any time since at least the early 1960s

Although the total stock of housing – all rentals, vacancies, and owner-occupied homes combined – still looks lofty, we would not be surprised at all to find the Census Bureau revising these figures over the next few years as we find out many homes have to be substantially refurbished before they can be lived in, with problems like missing copper pipes and untended leaks, because they’ve been vacant too long.

On a national average basis, homes are still screaming “buy.” We track the price-to-rent ratio for homes based on data from the Federal Reserve and Commerce Department. In the past 30 years, home prices have averaged 15.8 times annual rent. Now, they’re only 13.6 times rent, or roughly 14% below the norm. The same thing happens when we compare home prices to replacement cost, where the ratio is about 16% below the average of the past 30 years. Given loose monetary policy, we expect both rents and construction costs to move up noticeably in the next several years. So, to get back to more normal ratios means home prices will have to go up even faster.
And despite the rise in home building in the past year, expect at least another few years of gains. To keep up with population growth and “scrappage” rates, builders should start about 1.5 million homes per year. This includes both owner-occupied and rental properties. (For scrappage, think fires, floods, hurricanes, tornadoes, plus voluntary knockdowns.)

Lately builders have been starting homes at about a 750,000 annual rate, only half of what’s needed. That makes sense if they still want to cut inventories. But they’re not going to do that forever. In a few years they’ll realize they can stop cutting inventories and the pace of construction that makes this possible is 1.5 million units per year. That may seem like a steep climb from here, but we can get there in three years if housing starts grow at a 26% annual rate, slightly slower than over the past year! No wonder the NAHB index, which measures homebuilder confidence, has rebounded so sharply, from 14 last September to 37 in August.

Notice how the housing recovery is happening well after previous rounds of homebuyer tax credits and when the theoretical support from quantitative easing was supposed to be falling. Instead, what we have is a free-market recovery when government support has been going away. If the politicians just stay out of the way, it will be a powerful force for a broader economic recovery and many more jobs in the next few years.
Logged
DougMacG
Power User
***
Posts: 5944


« Reply #240 on: September 25, 2012, 01:25:13 PM »

Wesbury from yesterday:

"The two most prominent home price measures, Case-Shiller and FHFA, are both up at about a 7% annual rate in the past six months."

An artificial recovery, those homes were purchase at artificially low interest rates.  In monthly payments, people are not paying more.  Put interest rates at market levels or at levels Wesbury is calling for and what would home prices be? 

"The number of existing homes for sale is down to the same level as 2003-04."

Interesting.  I don't think the prices are back to 2003-4 levels.  He doesn't say that.

"...we now have a shortage of homes on the MLS."

Housing markets are local but that is quite a stretch IMO.  My properties are all for sale in my mind, but not at these prices.

"The market for new homes is even more extreme, with fewer new homes for sale than at any time since at least the early 1960s"

They didn't build new homes lately because of the glut of under-priced existing homes, contradicting IMO some of the above.

"In the past 30 years, home prices have averaged 15.8 times annual rent. Now, they’re only 13.6 times rent... Given loose monetary policy, we expect rents...to move up noticeably in the next several years. So, to get back to more normal ratios means home prices will have to go up even faster."

My view is that rents are more closely tied to income than to dollars printed.  Rents and home prices will fully recover only if we pursue policies that enable a healthy business, investment and employment climate.  Forecasting markets and prices without knowing that isn't particularly informative.
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #241 on: September 25, 2012, 01:35:49 PM »

I've asked our Pat to comment. He is deep in the trenches of real estate reality as usual, but if he can find a bit of time he will come share his thoughts.
Logged
DougMacG
Power User
***
Posts: 5944


« Reply #242 on: September 25, 2012, 01:48:32 PM »

I've asked our Pat to comment. He is deep in the trenches of real estate reality as usual, but if he can find a bit of time he will come share his thoughts.

These are minor points of contention I have with Wesbury.  I am really just saying that if this is strength I would hate to see weakness.  Pat can probably tell us more about what the backlog of foreclosures and underwater properties still is.

Another point is that demand I think is shifting to smaller family sizes needing smaller units (with smaller incomes).  It is not all about numbers of properties.

Grow the economy, get the real unemployment rate down from nearly 20% and  home starts and home values will take care of themselves; that's my view.  Most of what government intervention does in the housing market is to screw things up.
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #243 on: September 25, 2012, 04:37:14 PM »

U.S. home prices in July posted their largest year-to-date gain in seven years, according to a report Tuesday that offered the latest confirmation of a broad housing-market pickup that began this year.

 
The Case-Shiller index posted a 1.6% month-to-month increase in July; home prices reached their highest level in nearly two years. Nick Timiraos reports on Markets Hub. Photo: Reuters.
.
Prices rose by 1.2% from one year ago, according to the Standard & Poor's/Case-Shiller index of 20 major metropolitan areas, the largest year-over-year gain since home-buyer tax credits fueled a burst of sales two years ago.  But prices were up by 5.9% for the first seven months of the year, which was significantly better than increases of 0.4% and 2.1% for the same period in 2011 and 2010, respectively.  Prices rose in 16 of 20 metro areas tracked by the index when compared with one year ago, with the largest gains reported in Phoenix (16.6%), Minneapolis (6.4%) and Detroit (6.2%). Atlanta, Chicago, Las Vegas, and New York posted declines.

Home prices typically rise during the summer, when sales are strongest. The Case-Shiller index measures prices using a three-month average and is reported with a two month lag. The data released Tuesday covers prices recorded for the May-to-July period.

Prices still stand nearly 30% below their 2006 peak, but that is an improvement over the 35% peak-to-trough decline recorded in February. Data last week showed that sales of previously owned homes and construction of single-family housing units had reached their highest levels in more than two years.

"All in all, we are more optimistic about housing," said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.

Prices began rallying earlier this year amid sharp declines in the number of properties listed for sale, particularly foreclosed homes that sell at larger discounts. Inventories remain low because investors have been buying up homes that can be converted as rentals while traditional home-sellers have opted to keep their properties off the market. Many sellers may be unable to sell because they owe more than their homes are worth, while others could be holding out for better prices.

A separate home-price index released by the Federal Housing Finance Agency on Monday showed that prices rose by 3.7% from one year ago in July. Prices rose by 0.2% from June on a seasonally adjusted basis.


"The news on home prices in this report confirm recent good news about housing," said Mr. Blitzer. He said single-family housing starts are well ahead of last year's pace, existing-home sales are up, the inventory of homes for sale is down and foreclosure activity is slowing. "All in all, we are more optimistic about housing," he said.

Mr. Blitzer also said that among the cities, Miami and Phoenix are both well off their bottoms, with positive monthly gains since the end of 2011.

On a year-to-year basis, the 10-city index and 20-city index were up 0.6% and 1.2%, respectively.

Separately, the Conference Board, a private research group, said its index of consumer confidence rose nine points to 70.3 this month from a revised 61.3 in August, first reported as 60.6. The latest index was far better than the 65.0 expected by economists surveyed by Dow Jones Newswires.

The gain echoes good September readings on how consumers view the economy reported earlier this month by the Royal Bank of Canada and Thomson Reuters-University of Michigan. Better consumer confidence should lead to stronger consumer spending, which accounts for the bulk of U.S. economic activity.

Within the Conference Board's report, the present-situation index, a gauge of consumers' assessment of current economic conditions, rose to 50.2 from a revised 46.5, originally put at 45.8.

Consumer expectations for economic activity over the next six months jumped to 83.7 from a revised 71.1, first reported as 70.5. The index is also at its highest since February.

Consumers were slightly more upbeat about current labor-market conditions, which is a positive indicator for September payrolls.

The board's survey showed 8.3% of respondents now think jobs are "plentiful," up from 7.2% thinking that in August. Another 39.9% think jobs are "hard to get" down from 40.6% last month.

The jump in the expectations index can be traced to consumers' outlook for future labor conditions. The results show 18.5% think there will be more jobs in the next six months, up from 15.8% thinking that in August. A similar 18.5% think there will be fewer jobs, but that is down from 23.7% saying that last month.

—Kathleen Madigan and Saabira Chaudhuri contributed to this article
Logged
DougMacG
Power User
***
Posts: 5944


« Reply #244 on: September 28, 2012, 11:41:04 AM »

From the WSJ housing story: "Prices still stand nearly 30% below their 2006 peak"

That was my main complaint with the Wesbury analysis, it seemed to skip the context that Americans are still stinging from the loss of personal wealth, 17 trillion of dollars (?), roughly a year and a half of national income, in the housing collapse and it isn't being recouped with sales numbers and prices at these levels.  It still looks like a slow moving, sputtering market to me.

Roughly speaking, all the people who had 30% or less equity in 2006 with all those equity loans who are still in their home are still at either zero equity or underwater.  Zero equity or underwater to me means they are not really homeowners.
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #245 on: October 17, 2012, 10:36:33 AM »



Data Watch
________________________________________
Home Building Soared in September, up 15% to 872K Units at an Annual Rate To view this article, Click Here
Brian S. Wesbury - Chief Economist
Bob Stein, CFA - Senior Economist
Date: 10/17/2012
Housing starts soared 15.0% in September to 872,000 units at an annual rate, crushing the consensus expected 770,000 pace. Starts are up 34.8% versus a year ago.
The rise in starts in September was due to both an 11.0% gain in single-family homes and a 25.1% gain in multi-family starts. Single-family starts are up 42.9% from a year ago, while multi-family starts are up 19.6%.

Starts rose in the Midwest, South, and West, but declined slightly in the Northeast.

New building permits increased 11.6% in September to an 894,000 annual rate, easily beating the consensus expected pace of 810,000. Compared to a year ago, permits for single-unit homes are up 27.3% while permits for multi-family units are up 85.6% (no, that’s not a typo!).

Implications: Home building soared in September, not only crushing consensus expectations, but easily beating every single economic forecast for both housing starts and permits for future construction. Housing starts are up 34.8% from a year ago and builders are now starting homes at the fastest pace since July 2008. Even more impressive, the gains were not lopsided toward the volatile multi-family sector. The 11% growth in single-family starts accounted for about half of the increase in total starts. As the charts to the right show, both single-family and multi-family starts and permits are trending higher. The total number of homes under construction (started, but not yet finished) are up 21% from a year ago and increased for the 13th straight month, the first time this has happened since back during the building boom in 2003-2004. Based on population growth and “scrappage,” housing starts will eventually rise to about 1.5 million units per year (probably by 2015-16), which means the recovery in home building is still young. That may seem like a big leap over the next few years, but a gain of 20% per year for the next three years gets us up to that level. And that pace of increase is slower than the gains over the past twelve months. Don’t expect a straight line recovery, there will be zigs and zags along the way, but the overall trend will continue higher. In other recent housing news, the NAHB index, a measure of builder confidence, hit 41 in October, the highest level since mid-2006. For a little more on the housing recovery, please see an interview from a month ago on Bloomberg TV here.
Logged
G M
Power User
***
Posts: 12040


« Reply #246 on: October 17, 2012, 04:10:54 PM »

I'll leave the heavy lifting up to Pat, but my gut says that Wesbury is full of Krugman again.




Data Watch
________________________________________
Home Building Soared in September, up 15% to 872K Units at an Annual Rate To view this article, Click Here
Brian S. Wesbury - Chief Economist
Bob Stein, CFA - Senior Economist
Date: 10/17/2012
Housing starts soared 15.0% in September to 872,000 units at an annual rate, crushing the consensus expected 770,000 pace. Starts are up 34.8% versus a year ago.
The rise in starts in September was due to both an 11.0% gain in single-family homes and a 25.1% gain in multi-family starts. Single-family starts are up 42.9% from a year ago, while multi-family starts are up 19.6%.

Starts rose in the Midwest, South, and West, but declined slightly in the Northeast.

New building permits increased 11.6% in September to an 894,000 annual rate, easily beating the consensus expected pace of 810,000. Compared to a year ago, permits for single-unit homes are up 27.3% while permits for multi-family units are up 85.6% (no, that’s not a typo!).

Implications: Home building soared in September, not only crushing consensus expectations, but easily beating every single economic forecast for both housing starts and permits for future construction. Housing starts are up 34.8% from a year ago and builders are now starting homes at the fastest pace since July 2008. Even more impressive, the gains were not lopsided toward the volatile multi-family sector. The 11% growth in single-family starts accounted for about half of the increase in total starts. As the charts to the right show, both single-family and multi-family starts and permits are trending higher. The total number of homes under construction (started, but not yet finished) are up 21% from a year ago and increased for the 13th straight month, the first time this has happened since back during the building boom in 2003-2004. Based on population growth and “scrappage,” housing starts will eventually rise to about 1.5 million units per year (probably by 2015-16), which means the recovery in home building is still young. That may seem like a big leap over the next few years, but a gain of 20% per year for the next three years gets us up to that level. And that pace of increase is slower than the gains over the past twelve months. Don’t expect a straight line recovery, there will be zigs and zags along the way, but the overall trend will continue higher. In other recent housing news, the NAHB index, a measure of builder confidence, hit 41 in October, the highest level since mid-2006. For a little more on the housing recovery, please see an interview from a month ago on Bloomberg TV here.

Logged
DougMacG
Power User
***
Posts: 5944


« Reply #247 on: October 17, 2012, 11:41:30 PM »

Considering that we have delayed foreclosures and the fought off a full correction in the housing market, and considering that we don't want to repeat the mistakes of the last decade namely a big bubble market in housing that had to burst, isn't the news of dramatically increasing housing starts in an artificial glut market actually bad economic news?
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #248 on: October 18, 2012, 12:24:55 AM »

Our Pat may be posting in the next day or two on this.
Logged
Crafty_Dog
Administrator
Power User
*****
Posts: 31234


« Reply #249 on: October 20, 2012, 07:40:20 AM »

a) Pat is working on how to post some charts here.  Anyone here able to help him?

B) Wesbury

Existing home sales declined 1.7% in September To view this article, Click Here
Brian S. Wesbury - Chief Economist
Robert Stein, CFA - Senior Economist
Date: 10/19/2012
Existing home sales declined 1.7% in September to an annual rate of 4.75 million units, exactly matching consensus expectations.  Sales are up 11.0% versus a year ago.
Sales in August were down in the Northeast, Midwest and West but up in the South.  The fall in sales was all due to a decline in single-family home sales; sales of condo/coops were unchanged.
 
The median price of an existing home fell slightly to $183,900 in September (not seasonally adjusted), but is up 11.3% versus a year ago.  Average prices are up 9.2% versus last year.
 
The months’ supply of existing homes (how long it would take to sell the entire inventory at the current sales rate) fell to 5.9 in September from 6.0 in August.  The decline in the months’ supply was all due to a drop in single-family inventories.
 
Implications: Although existing home sales fell slightly in September, they remain right near the highest level in over two years and there should be no doubt the housing market is in recovery. Sales are up 11% from a year ago while home prices are up 11.3%.  Meanwhile, the inventory of existing homes fell to 2.32 million in September from 2.40 million in August, the lowest level since March 2005! Inventories are down 20% from a year ago and the months’ supply of homes (how long it would take to sell the entire inventory at the current selling rate) fell to 5.9, the lowest level since March 2006. Just a year ago, the months’ supply was 8.1. In the year ahead, higher prices and sales volumes should lure more potential sellers into the market. The rise in median prices can be attributed to a couple of factors. First, a lack of inventory while demand is picking up.  Second, fewer distressed sales and more sales of larger homes.  In general, it still remains tougher than normal to buy a home.  Despite record low mortgage rates, home buyers face very tight credit conditions.  Tight credit conditions would also explain why all-cash transactions accounted for 28 percent of purchases in September versus a traditional share of about 10 percent.  Those with cash are able to take advantage of home prices that are extremely low relative to fundamentals (such as rents and replacement costs); for them, it’s a great time to buy.  With credit conditions remaining tight, we don’t expect a huge increase in home sales anytime soon, but the housing market is definitely on the mend.  In other recent news, new claims for unemployment insurance increased 46,000 last week to 388,000.  The week before, claims had dropped to 342,000.  The true trend is likely somewhere in between; averaging the two figures gets to 365,000 which is very close to the four-week moving average of 366,000.  The Philadelphia Fed index, which measures manufacturing sentiment in that region, increased to +5.7 in October from -1.9 in September.  This is the first positive reading and the highest level since April.
Logged
Pages: 1 ... 3 4 [5] 6 7 ... 10 Print 
« previous next »
Jump to:  

Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2013, Simple Machines Valid XHTML 1.0! Valid CSS!