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NAHB Reminds Home Buyers: Tax Credit Expiring Soon
Thursday, March 4, 2010
The National Association of Home Builders (NAHB)
wants potential home buyers to be aware that they still have the opportunity
to take advantage of the $8,000 first-time home buyer or $6,500 repeat
buyer tax credits, as long as they act quickly--the credits expire on
April 30, 2010.
"It's not too late to take advantage of the home buyer tax credit," said
NAHB Chairman Bob Jones, a builder and developer in Bloomfield Hills,
Mich. "There are plenty of existing homes on the market, and even
though the move-in ready newly constructed homes inventory has dwindled,
builders may still be able finish a home in time."
The IRS provides an additional two months beyond the deadline to close
the deal. Buyers who sign a sales contract by the April 30 deadline are
still eligible if they close the sale of the home by June 30, 2010.
More people than ever before are eligible for a home buyer tax credit,
NAHB estimates that close to 70 percent of all potential buyers should
qualify for some form of a credit.
"First-time" buyers
don't have to be buying their first home ever; they are defined by
the IRS as those who have not owned a principal
residence in the past three years. Repeat buyers may be eligible for
a new $6,500 credit, as long as they have owned and lived in their current
home at least five consecutive out of the past eight years.
The current credits also increase the income limits, enabling single
taxpayers with incomes up to $125,000 and married couples earning up
to $225,000 to potentially qualify for a full credit.
Source: NAHB
Economy Sheds 36,000 Jobs, Weather Impact Unclear
Friday, March 5, 2010
U.S. employers cut a smaller than expected 36,000 jobs in
February, leaving the unemployment rate steady at 9.7 percent, bolstering
views the labor market was on the brink of creating jobs.
The Labor Department said on Friday it was unclear how the severe snowstorms,
which hit much of the country last month, had impacted payrolls. Jobs
losses for December and January were revised to show 35,000 fewer jobs
lost than previously reported.
Analysts polled by Reuters had expected non-farm payrolls to drop 50,000
last month and the unemployment rate to edge up to 9.8 percent. The median
forecast from the 20 most accurate forecasters also saw payrolls falling
by 50,000, while the 10 most accurate economists predicted a 70,000 decline.
"
This is encouraging news, indicating the recovery is still on track," said
Gary Thayer, chief macrostrategist at Wells Fargo Advisors in St. Louis.
U.S. stock index futures rallied, while yields on government debt rose.
The U.S. dollar rose against the euro
Traders bet the stronger-than-expected number might encourage the Federal
Reserve to begin lifting short term interest rates from near zero later
this year. Trading in U.S. short-term interest rate futures after the
data was published showed investors thought the central bank would hike
its benchmark interest rate by November.
"
The emergency interest rate level is no longer warranted either for the
markets or the economy," said Chris Rupkey, an economist at Bank
of Tokyo-Mitsubishi in New York.
"
The Fed is going to take out the scissors to its press statement. They
will no longer be telling the global markets on March 16 that exceptionally
low rates are needed for an extended period," he added, referring
to the Fed's next policy-setting meeting.
Half of the job losses came from government workers, but that category
is expected to see huge gains in the coming months as more workers are
hired for the once-a-decade U.S. census. In February, 15,000 temporary
census workers were hired.
Source: Reuters
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Poll Shows Strong Support for Government Housing Initiatives
Monday,
March 1, 2010
Americans remain strongly committed to federal support for
home buyers, according to a recent survey of U.S. households.
Roughly 68 percent of those polled said the government should continue
to support housing, and
65 percent believe the government should be doing more to keep families
from losing their homes to foreclosure.
The poll included both home owners and renters and was conducted for
the National Association of Home Builders (NAHB) by RT Strategies, a
non-partisan public opinion polling firm based in Washington, D.C. RT
Strategies interviewed a representative sample of 1,000 adults nationwide
by telephone using live interviewers on January 29-31, 2010. The sample
included 170 interviews with respondents from cell-phone-only households.
Among those polled, some key groups said the government should continue
to play a vital role in maintaining a healthy housing market. For example,
78 percent of all potential home buyers, including 81 percent of renters
intending to buy a home in the near future, said the government should
continue to support housing.
Roughly 65 percent of home owners said the government also needs to
do more to keep families from losing their homes. Support for more foreclosure
protection was not confined merely to current home owners. Among renters,
84 percent said the government needs to do more to helped strapped borrowers.
This issue is particularly important to women, with 71 percent supporting
greater foreclosure protection, compared to 58 percent of men.
Keeping families in their homes is also particularly important to first-time
home buyers, as 78 percent of young adults under age 30 support greater
foreclosure protection. And 69 percent of adults who are 30 to 44, the
prime age range for move-up buyers, said they support more foreclosure
protection.
Overall, roughly two-in-three respondents said they own their home.
Among renters, about two-in-three intend to buy a home in the near future.
In addition, 15 percent of current home owners intend to buy a home in
the near future.
The poll asked respondents for their views regarding the Worker, Homeownership,
and Business Assistance Act of 2009 that extended a tax credit of up
to $8,000 for qualified first-time home buyers purchasing a principal
residence. The legislation, which was signed into law by President Obama
in November 2009, also authorized a tax credit of up to $6,500 for qualified
repeat home buyers.
Overall, 8 percent of those surveyed said they intend to take advantage
of that credit, while another 24 percent who might have been interested
in using the tax credit said they cannot afford to purchase a home at
this time. Of the 33 percent of respondents who said they are planning
to buy a home (both renters and current home owners), roughly 17 percent
said they intend to use the tax credit.
Financial concerns continue to be the greatest barrier to growth in
the housing market. Among renters nationwide who aspire to own their
own home, 39 percent simply don't have the money to buy a home at this
time, and another 20 percent said the primary obstacle is that they feel
they cannot qualify for a loan. Larger economic issues also play a role,
as 18 percent said that job security is the greatest obstacle they face
in trying to buy a home.
Weakness in the housing market itself may be blocking some home owners
who would like to buy a new home, as 29 percent of current home owners
said their greatest obstacle to purchasing another home is their inability
to sell their current home. Beyond that, among current home owners who
aspire to buy a new home, 7 percent feel trapped by a mortgage that exceeds
the value of their current home, 14 percent fear that the value of a
new home might fall after they make the investment, and 13 percent say
home prices are just too high to allow them to buy a new home at this
time.
Even amid a housing market downturn, 40 percent of respondents said
their home is their most valuable investment, twice the number who cite
any other single investment - 401k accounts, savings accounts and CDs,
stocks and bonds, or mutual funds - as their leading family investment.
Source: NAHB
New-Homes Sales Decline in January
Wednesday, February 24, 2010
Sales of newly built, single-family homes declined
11.2 percent in January to a seasonally adjusted annual rate of 309,000
units, the slowest pace on record, according to figures released by
the U.S. Commerce Department today.
"This disappointing report highlights just how fragile the economic
and housing recovery is right now, and the uncertainties that continue
to weigh on consumers, particularly with regard to concerns about job
security," said Bob Jones, chairman of the National Association
of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. "Even
with today's exceptionally favorable home buying conditions - including
low interest rates, stabilizing house prices and the availability of
home buyer tax credits - many consumers simply weren't confident enough
to go forward with a new-home purchase in the beginning of this year."
"While the overall economic picture has brightened somewhat, these
numbers indicate that the road to a housing and economic recovery remains
very uncertain. Many Americans have yet to see much evidence of improvement
first-hand, and are therefore reluctant to consider a home purchase," noted
NAHB Chief Economist David Crowe. "Meanwhile, competition from below-market-priced
foreclosed and short-sale homes poses an additional challenge to the
new-homes market right now. Although we continue to expect a boost in
overall sales activity prior to the expiration of the $8,000 and $6,500
home buyer tax credits at the end of April, unseasonably poor weather
across much of the country may delay the full impact of those incentives
until closer to the deadline."
The Midwest was the only region of the country to register an increase
in new-home sales this January, posting a 2.1 percent gain from an abnormally
low December rate. The Northeast and West posted double-digit declines,
of 35.1 percent and 11.9 percent, respectively, and the South posted
a 9.5 percent decline.
While the overall number of new homes on the market remained virtually
unchanged in January, at 234,000 units, the month's supply rose to 9.1
from 8.0 in the previous month due to January's slower sales pace.
Source: NAHB
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Home Prices Seen Stabilizing, Sales Rising
Monday, February 22, 2010
* The median
forecast is for the S&P composite index of 20 metropolitan
areas to be unchanged in December from November, non-seasonally adjusted,
and down 3.2 percent from December 2008. This would follow a 0.2 percent
November monthly decline and 5.3 percent annual drop.
* The median forecast is for a rise of about 5.3 percent in January new
home sales to 360,000 annual units, following a 7.6 percent drop to 342,000
units in December.
* The median forecast is for a 1 percent rise in January existing home
sales to 5.50 million units, after a 16.7 percent plunge in December
U.S. home prices probably stagnated in December, with the S&P/Case-Shiller
20-city index showing no change after a 0.2 percent November decline
and a total average price plunge of about 30 percent from 2006 peaks.
The rate of annual decline also continued to improve, based on the median
forecast in a Reuters poll, with a 3.2 percent drop expected to follow
the 5.3 percent downturn in November.
Economists in a separate Reuters housing poll last week said the bottom
had probably been reached but prices were unlikely to gain this year.
The 20-city index would be unchanged in 2010 before rising 2 percent
next year, the poll found.
But even stability is welcome after prices tumbled for more than three
years, helping send the U.S. housing market into freefall and the economy
into recession.
Housing is gaining some traction on the back of massive government aid,
including buyer tax incentives that are set to end this spring.
Source: Reuters
Housing
Construction Up 2.8 Percent in January
Wednesday February 17, 2010
Housing construction posted a better-than-expected
increase in January which pushed activity to the highest level in six
months. The solid gain raised hopes that the construction industry
is beginning to mount a sustained rebound from its worst slump in
decades.
The Commerce Department said Wednesday that construction of new homes
and apartments rose 2.8 percent last month to a seasonally adjusted
annual rate of 591,000 units. That was better than the 580,000 annual
pace that
economists were forecasting.
Applications for building permits, considered a good barometer of future
activity, fell 4.9 percent to a rate of 621,000, but that was after
two months of large increases.
In another sign of strength, Wednesday's report revised up activity
in December to show builders were starting construction at an annual
pace
of 575,000 units during that month, much stronger than the 557,000
originally reported. Even with the upward revision, activity fell a
slight 0.7 percent
in December, a dip that was blamed on severe weather in many parts
of the country that depressed construction activity.
Economists are hoping that housing is beginning to recover and a rebound
in this area will help support the economy as it struggles to mount
a sustained recovery from the deepest recession since the 1930s.
In a separate report suggesting strength, the Federal Reserve said
industrial production rose 0.9 percent in January, the seventh consecutive
monthly
increase.
January's numbers rose in all three major categories: manufacturing,
mining and energy utilities. That is the first such show of strength
since August 2009.
Manufacturing rose 1.0 percent, while mining and utilities each gained
0.7 percent, the report said.
In the housing report, the strength last month was led by a 10 percent
jump in activity in the Northeast and an 8.9 percent increase in the
West. Construction was up a smaller 1 percent in the South and 3.2
percent in the Midwest.
The strength in January pushed construction activity up by 21.1 percent
from the pace in January 2009. Last month's building rate the fastest
pace since July.
Construction of single-family homes rose by 1.5 percent to a seasonally
adjusted annual rate of 484,000 units while construction of multi-family
units increased 9.2 percent to an annual rate of 107,000 units.
The National Association of Home Builders said Tuesday that its housing
market index rose by two points to 17 in February after having fallen
for two consecutive months.
That increase in sentiment was likely influenced by a number of favorable
developments including a report earlier this month that the nation's
unemployment rate fell in January to 9.7 percent, still high, but lower
than the 10 percent of the previous month.
Source: Associated Press
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Fannie,
Freddie Regulator Pitches New Housing Goals
Wednesday, February 17, 2010
The federal regulator of Fannie Mae and Freddie
Mac on Wednesday proposed an overhaul of rules governing how the mortgage
funding giants serve low-income homeowners while limiting their risks.
The Federal Housing Finance Agency for 2010 and 2011 said it is planning
goals for single-family home purchases for low income families, very
low-income families and families in low-income, high minority and disaster
areas.
But in a twist from past practices, the rules would prohibit Fannie Mae
and Freddie Mac -- the two biggest sources of U.S. housing finance --
from using investments in Wall Street's mortgage securities to satisfy
the goals.
Fannie Mae (FNM.N) and Freddie Mac (FRE.N) had aggressively purchased
the so-called "private-label" securities to help fulfill government
goals as Wall Street underwriters took a larger share of the U.S. mortgage
business. Those mortgages contained subprime and other risky loans where
rising delinquencies have triggered billions of dollars in losses.
The companies during the housing boom had to stretch to meet affordable
housing goals, which lowered their standards, James Lockhart, the former
head of the FHFA, said this month. Fannie Mae and Freddie Mac executives
were also pushed to be more aggressive by equity investors, without any
checks from debt holders who felt protected by an implicit government
guarantee, he said.
The government seized control of Fannie Mae and Freddie Mac in September
2008 after losses threatened the companies' ability to stabilize a faltering
housing market. Since then, the companies have required some $111 billion
in support from the U.S. Treasury and have said they would need more
as they administer government foreclosure prevention efforts. "FHFA
does not intend for the enterprises to undertake uneconomic or high-risk
activities in support of the goals, nor does it intend for the enterprises'
state of conservatorship to be a justification for withdrawing support
from these market segments," the FHFA said in a statement.
Affordable housing goals were previously set by the U.S. Department of
Housing and Urban Development.
In addition to "benchmark" goals, Fannie Mae and Freddie Mac
may also use a "market-based alternative" measure to meet their
goals, the FHFA said.
Lockhart made his comments at a meeting of the American Securitization
Forum in Washington, where investors and Wall Street dealers were discussing
ways to restart the private mortgage bond market. More private credit
is key to supporting housing as the government weans markets from its
emergency supports, analysts said.
Source:
Reuters
Housing
Affordability Hovers Near Record-High Level for Fourth Consecutive
Quarter as Economy Begins to Rebound
Wednesday
February 17, 2010
Nationwide housing affordability, bolstered by
favorable interest rates and low house prices, closed out the year
near its highest level since the series was first compiled 18 years
ago, according to the National Association of Home Builders/Wells
Fargo Housing Opportunity Index (HOI) released today. The HOI showed that 70.8 percent of all new and existing homes sold
in the final quarter of 2009 were affordable to families earning the
national median income of $64,000, slightly higher than the previous
quarter and near the record-high 72.5 percent set during the first quarter
of 2009. Affordability during the final quarter of the year was up from
62.4 percent during the fourth quarter of 2008.
"Favorable mortgage rates and sliding house prices that have now
started to stabilize nationally have both contributed to a record year
for housing affordability in 2009," said NAHB Chairman Bob Jones,
a home builder from Bloomfield Hills, Mich. "With interest rates
still hovering at low levels and the economy beginning to rebound, the
federal housing tax credit will encourage even more first-time and repeat
home buyers to enter the market and help further stabilize housing and
the economy by creating new jobs, stimulating home sales and reducing
foreclosures."
Indianapolis again was the most affordable major housing market in the
country during the fourth quarter, a position the metro area now has
held for four and a half years. More than 95 percent of all homes sold
were affordable to households earning the area's median family income
of $68,100.
Also near the top of the list of the most affordable major metro housing
markets were Detroit-Livonia-Dearborn, Mich.; Dayton, Ohio; Youngstown-Warren-Boardman,
Ohio-Pa.; and Akron, Ohio.
Five smaller housing markets posted even higher affordability scores
than Indianapolis, with Kokomo, Ind., which historically has had a favorable
income-to-house price ratio, outscoring all others. In Kokomo, 98 percent
of homes sold during the fourth quarter of 2009 were affordable to median-income
earners. Other smaller housing markets near the top of the index included
Monroe, Mich.; Flint, Mich.; Lima, Ohio; and Bay City, Mich., respectively.
New York-White Plains-Wayne, N.Y.-N.J., continued to lead the nation
as its least affordable major housing market during the fourth quarter
of 2009. The New York metro area has occupied this position for seven
consecutive quarters. Slightly less than 20 percent of all homes sold
during the final quarter of 2009 were affordable to those earning the
New York area's median income of $64,800.
The other major metro areas near the bottom of the affordability scale
included San Francisco; Honolulu; Santa Ana-Anaheim-Irvine, Calif.; and
Los Angeles-Long Beach-Redwood City, Calif.
San Luis Obispo-Paso Robles, Calif. was the least affordable of the
smaller metro housing markets in the country during the fourth quarter.
Others near the bottom of the chart included Santa Cruz-Watsonville,
Calif.; Ocean City, N.J.; Napa, Calif.; and Santa Barbara-Santa Maria-Goleta,
Calif.
Source:
NAHB
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Builder
Confidence Improves in February
Tuesday,
February 16, 2010
Builder confidence in the market for newly
built, single-family homes rose two points to 17 in February as
favorable home
buying conditions and signs of healing in the job market helped boost
the National Association of Home Builders/Wells Fargo Housing Market
Index (HMI), released today.
"
Continued low interest rates, very attractive home prices that appear
to have stabilized in many markets, and the availability of the home
buyer tax credit make this an opportune time for potential purchasers," said
NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "As
a result, builders are slightly more optimistic that the housing recovery
is finally beginning to take root."
"
Builders are just beginning to see the anticipated effects of the home
buyer tax credit on consumer demand," said NAHB Chief Economist
David Crowe. "Meanwhile, another source of encouragement is the
improving employment market, which is key to any sustainable economic
or housing recovery. That said, several limiting factors are still weighing
down builder expectations, including the large number of foreclosed homes
on the market, the lack of available credit for new and existing projects,
and inappropriately low appraisals tied to the use of distressed properties
as comps."
Derived from a monthly survey that NAHB has been conducting for more
than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder
perceptions of current single-family home sales and sales expectations
for the next six months as "good," "fair" or "poor." The
survey also asks builders to rate traffic of prospective buyers as "high
to very high," "average" or "low to very low." Scores
for each component are then used to calculate a seasonally adjusted index
where any number over 50 indicates that more builders view sales conditions
as good than poor.
Source: NAHB
Remodeling
Market Continues to Deteriorate Under Strained Economy
Wednesday,
February 10, 2010 Market
conditions for residential remodeling tumbled downward during
the fourth quarter of 2009, according to the latest National
Association of Home Builders' (NAHB) Remodeling Market Index (RMI). The
current market conditions index fell to 36.4 from 39.8 in the third quarter.
The index of future indicators dropped to 31.4 from 38.7 in the previous
quarter.
The RMI measures remodeler perceptions of market demand for current
and future residential remodeling projects. Any number below 50 indicates
that more remodelers say market conditions are getting worse than report
improving conditions. The RMI has been running below 50 since the final
quarter of 2005.
"We're hearing many remodelers have laid off workers because they
have no jobs coming in and are struggling to survive," said NAHB
Remodelers Chairman Donna Shirey, CGR, CAPS, CGP, a remodeler from Issaquah,
Wash. "Remodelers are pounding the pavement to find work and stay
open, including taking on smaller jobs and competing with unqualified
contractors."
The index
for current remodeling market conditions slumped in the Northeast to
27.7 (from 33.7 in the third quarter), descended in the Midwest to
37.5 (from 43.2) and decreased in the West to 41.7 (from 47.3). In the
South, the current index rose slightly to 40 (from 38.6). Major additions
declined to 40 (from 41.9), and minor additions also fell to 40.7 (from
43.2). Maintenance and repair plunged to 27.1 (from 33.1).
Summary indices for future market indicators exhibit bleak expectations
for the remodeling market. Calls for bids dropped to 37.5 (from 46.5
in the third quarter) and appointments for proposals slid to 34.4 (from
43.5). The backlog of jobs reduced to 31.9 (from 37.2) and the amount
of work committed for the next three months fell to 21.9 (from 27.5).
"Although earlier quarters of 2009 showed tentative improvements
for remodeling market conditions, remodelers have seen work fall backward
at the end of the year," said NAHB Chief Economist David Crowe. "Like
new home construction, remodelers are feeling the effects of consumers'
uncertain job future, their level of confidence and unwillingness to
spend their equity or savings. Competition from new home construction
workers entering the remodeling market and unemployed contractors has
stretched an already thin customer base."
Source:
NAHB
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Obama
Hopes to See Jobs Package in Coming Weeks
Tuesday, February 9, 2010
President
Barack Obama, reaching out to lawmakers in both U.S. political parties,
said on Tuesday he hoped Congress would
soon deliver a package of measures to boost U.S. employment and economic
growth.
"
My hope is ... that both in the House (of Representatives) and the Senate,
we'll see some packages moving over the next several weeks that can provide
a jumpstart to hiring and start lowering the unemployment rate," Obama
told reporters ahead of a meeting with Democratic and Republican party
leaders.
The president, a Democrat, said there were ideas on both sides of the
political spectrum that would, for example, allow the United States to
lower small business tax rates to encourage hiring.
Obama also made a push for tackling the U.S. deficit -- an issue on which
lawmakers from both parties hope to capitalize ahead of November elections
that could change the balance of power in Congress.
"
Another area where I hope we can find some agreement is on the issue
of getting our deficits and debt under control. Both parties have stated
their concerns about it, and I think both parties recognize that it's
going to take a lot of work," Obama said.
" I have put forward the idea of a fiscal commission and I'm going to be
discussing both with my Democratic and Republican colleagues how we can
get that moving as quickly as possible so that we can start taking some
concrete action."
Obama has said he will issue an executive order to set up the fiscal
commission to study options on spending and taxes after lawmakers failed
to create a congressional panel to address the issue.
The president's meeting was part of an effort by the White House to bridge
differences between Republicans and Democrats, especially in the area
of job creation and economic recovery, after the recent election in Massachusetts
deprived Obama's party of its "super majority" in the Senate.
Source: Reuters
Best Economic
Growth in Six Years
Friday, January 29, 2010
The U.S. economy grew at the fastest pace
in more than six years during the fourth quarter of 2009, according to
a government report Friday.
The nation's gross domestic product, the broadest measure of economic
activity, rose at a 5.7% annual rate in the fourth quarter. That was
much stronger than expected and provides another sign that a recovery
in the economy is taking hold.
Economists surveyed by Briefing.com had forecast growth of 4.7%.
Source:
CNN Money
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New-Home Sales Decline in December
Wednesday,
January 27, 2010
Sales of newly built, single-family homes fell
7.6 percent in December to a seasonally adjusted annual rate of 342,000
units, according to figures released by the U.S. Commerce Department
today. "As expected, the road to a housing recovery is proving to be a
very bumpy ride," said Bob Jones, a home builder from Bloomfield
Hills, Mich., and newly elected chairman of the National Association
of Home Builders (NAHB). "Although purchasing conditions for new
homes are extremely favorable thanks to the expanded home buyer tax credit
and historically low interest rates, the sobering realities of a weak
economy and job market continued to drag on consumers' willingness to
go forward with a purchase near the end of 2009. We do, however, expect
more buyers to begin taking advantage of the new tax credit in the coming
months."
"December's shortfall in new-home sales is not that surprising,
given the fact that it was still too early for most consumers to know
about and act upon the newly extended home buyer tax credit," noted
NAHB Chief Economist David Crowe. "It is also likely that some sales
that might otherwise have taken place at the end of the year were pulled
forward to earlier months to take advantage of the previous tax credit
that expired at the end of November, thereby exacerbating the December
decline. That said, we are looking forward to the newly extended and
expanded home buyer tax credit beginning to have a positive impact on
buyer demand going forward."
Regionally, sales of new single-family homes were quite mixed in December.
Displaying typical month-to-month volatility, the Northeast posted a
42.9 percent gain, the Midwest registered a 41.1 percent decline, the
South posted a 7.3 percent decline and the West generated a 5.2 percent
gain.
Meanwhile, the number of newly built homes on the market dropped from
November's 235,000 units to 231,000 units in December. This is the lowest
inventory number in nearly 40 years. Because of December's slower sales
pace, the months' supply rose from 7.6 in November to 8.1 in December.
On an annual basis, year-end figures from the Commerce Department revealed
that an estimated 374,000 new homes were sold in 2009. This was down
nearly 23 percent from the previous year and was the lowest number of
new-home sales since the government started keeping track in 1963.
Source: NAHB
Existing
Home Sales Sink 16.7%
Monday,
January 25, 2010
Existing home sales fell in December, the
month after a federal tax credit was slated to expire, according to
a real estate industry report issued Monday.
The National Association of Realtors reported that existing home sales
plunged 16.7% last month to a seasonally adjusted annual rate of 5.45
million units, down from the revised rate of 6.54 million in November.
Still, sales year-over-year were up 15%.
Analysts surveyed by Briefing.com had expected the December sales rate
to hit 5.9 million annual units.
It was expected that sales would decline from November to December, because
November was slated to be the last month in which sales to first-time
homebuyers could qualify for a federal tax credit of up to $8,000. Lawmakers
have since extended that deadline through April 30, adding a new credit
of up to $6,500 for some existing home owners who move.
"
This is a huge blow, much bigger than we expected," said PNC senior
economist Craig Thomas. "Unfortunately, we'll continue to see this
kind of volatility as economic supports like the tax credit are taken
away."
Homebuyers rushing to get the credit made for a tough month-to-month
comparison for December, Thomas said, and the month also suffers from
seasonal issues like bad weather and holidays.
For all of 2009 there were 5,156,000 existing-home sales, which was 4.9%
higher than 2008's total. That was the first annual sales gain since
2005.
In November, the planned tax credit expiration helped existing home sales
gain 7.4% -- and that followed a 10% surge the previous month.
Despite December's disappointment, PNC's Thomas thinks the tax credit
will help recharge the housing market the way Cash for Clunkers boosted
auto sales in the longer term. That market saw an artificial jump, then
dipped when the policy was dropped and then eventually got stronger.
"
Since Cash for Clunkers has been over, autos have seen stronger and more
sustainable sales -- and that's a function of a better economy," Thomas
said. "That means home sales are likely to follow." Source:
CNN Money
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North Carolina
Builder Elected to Leadership of NAHB
Friday, January 22, 2010
Rick Judson, a Charlotte, N.C.-based home builder
with more than 35 years of experience in the building industry, was
elected yesterday as the 2010 third vice chairman of the National Association
of Home Builders (NAHB) during the association's International Builders'
Show in Las Vegas.
Judson is owner of Evergreen Development Group.
"The housing industry still faces many challenges as it slowly
emerges from its worst downturn in decades," Judson said. "This
year, our top priorities will be to work with Congress, the Administration
and federal regulators to open up lines of credit for new housing production
and resolve problems with appropriate appraisal values on newly built
homes. As we work to stabilize housing prices, this will revitalize the
home building industry and help restore confidence in the American economy."
Judson has been active in the NAHB leadership structure at the local,
state and national levels throughout his career. He has served on NAHB's
board of directors since 1979 and has been a member of the NAHB executive
board since 2002. He has twice served as NAHB state representative from
North Carolina and is a two-time NAHB national area chairman representing
North Carolina, South Carolina and Georgia. He has chaired some of NAHB's
most important and influential committees, subcommittees and task forces,
including Budget and Finance, Investment and Public Affairs. In 2008,
he chaired the NAHB Housing Finance Task Force, which developed association
policy relating to Fannie Mae and Freddie Mac.
Judson served as 2004 president of the North Carolina Home Builders
Association and was named its associate of the year in 1988. During his
business career, he has founded and successfully operated several businesses,
including entities that have developed land for and built numerous single-family,
multifamily and commercial projects.
NAHB's newly elected senior officers serve on a multi-year leadership
ladder. Judson will become chairman of NAHB's board of directors in 2013. Source: NAHB
Michigan
Builder Elected Chairman of the Board of NAHB
Friday, January 22, 2010
Bob
Jones, a home builder and developer from Bloomfield Hills, Mich., yesterday
was elected as the 2009 chairman of the Board
of the National Association of Home Builders (NAHB). As president of
Robert R. Jones Homes, he specializes in land development and the design
and construction of single-family luxury homes throughout metropolitan
Detroit.
During Jones's 35-year career, he has earned a reputation for excellence
and established a continuing commitment to the home building industry
at the local, state and national levels. He assumes the leadership at
NAHB amidst signs that the housing industry may be emerging from the
worst economic crisis since the Great Depression.
"This has been an extraordinarily difficult time for builders across
the country," Jones said. "I believe it is my responsibility
to serve NAHB's members as we work to get the housing industry back on
its feet. I want to see residential construction regain its place as
the nation's engine of job growth."
Key issues on the
agenda for Jones and NAHB include the availability of financing for
acquisition, development and construction (AD&C),
as well as concerns about housing appraisals that often compare new homes
to foreclosed or distressed properties. NAHB is also working with federal
policy makers as they consider an overhaul of the nation's home mortgage
finance system.
Jones has been a member of the NAHB board of directors since 1979.
He was chairman of the Single Family Small Volume Builders Committee
in 2006, chairman of the Resolutions Committee in 2005, and vice chairman
of the National Council of the Housing Industry in 2004. He served
as an NAHB national vice president representing Illinois, Indiana and
Michigan in 2000 and 2001.
Representing his home state of Michigan, Jones was named NAHB State
Representative of the Year in 1999. He served on the Federal Government
Affairs Committee in 2003 and 2004, and on the NAHB Budget and Finance
Committee in 2005. He received the National Sales and Marketing Council's
Friend of the Institute Award in 2009. Jones is also a Certified Green
Professional (CGP).
At the state and local levels, Jones serves on the board of directors
of the Michigan Association of Home Builders (MAHB) and was the association's
president in 1999. He received the MAHB Housing Achievement Award in
2001. He is a member of the board of directors of the Building Industry
Association of Southeastern Michigan, served as the association's president
in 1994, and was inducted into its Hall of Fame in 2000.
Jones is involved
in a number of civic and business organizations. He currently serves
on the Michigan Chamber of Commerce board of directors.
He has chaired the board of trustees at St. Bonaventure University in
New York and the board of directors at St. Joseph Mercy Hospital-Oakland,
Mich. Michigan Gov. Jennifer Granholm appointed Jones to the Michigan
Land Use Leadership Council. Former Gov. John Engler appointed him to
the Michigan Residential Builders & Maintenance and Alteration Contractors
Licensing Board.
Source: NAHB
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Crowds More
Optimistic at the 2010 International Builders' Show. Says NAHB
Friday, January 22, 2010
Approximately
55,000 builders, remodelers and other members of the home building industry
crowded the aisles of the National
Association of Home Builders' International Builders' Show, which ended
its four-day run Friday at the Las Vegas Convention Center.
The mood? "I'd call it cautious optimism," said Ron Cook of
Tamko Building Products in Joplin, Mo., one of more than 1,100 exhibitors
at this year's event. "It's certainly different than it was last
year because we didn't quite know what we were in for," as the country
was still in the midst of the biggest recession since the 1930s. Members lined up at the Partnership Pavilion, a new NAHB initiative
on the show floor designed to match builders with financing sources.
The program was launched to help serve an industry still stymied by a
lack of available credit for new housing developments - as well as tighter
restrictions on home buyer mortgages.
Builders and remodelers also attended educational presentations on design
trends, energy retrofitting, marketing, low-income housing tax credits
and more than 175 other topics.
"We
came here to network," said
Clint Wilson of Hybrid Core Homes in Santa Rosa, Calif. The show seemed
livelier than last year's
event, he said, although he and his colleagues were disappointed that
The New American Home, the much-anticipated demonstration home that usually
draws huge crowds, was unavailable for touring this year because of financing
issues - a problem plaguing other builders throughout the industry.
A company manufacturing geothermal heating systems saw steady traffic
at its booth, according to Steve Smith, managing partner at Enertech
Manufacturing, LLC of Greenville, Ill., who said builders are particularly
interested in learning more about the tax credits available for installing
geothermal and other renewable energy heating and cooling systems.
"It's been a good, upbeat crowd," Smith said. "I
think we all have a more positive attitude for 2010. I've already talked
to
our marketing folks about getting a bigger booth at next year's show."
The next International Builders' Show takes place Jan. 12-15 at the Orange
County Convention Center in Orlando, Fla.
Source:
NAHB
Housing
Starts Fall, Producer Prices Rise
Wednesday, January 20, 2010
New U.S. housing starts unexpectedly fell in December, likely the result of unusually
cold weather, while producer prices rose for a third straight month.
The Commerce Department said on Wednesday housing starts fell 4 percent to a
seasonally adjusted annual rate of 557,000 units, pulled down by a drop in groundbreaking
activity for single-family dwellings. Analysts polled by Reuters had expected
housing starts to rise to 580,000 units.
Building permits, however, soared in December.
" At first glance housing starts were disappointing. But, they were offset
by a huge jump in building permits. The data is suggestive of a continued gain
in housing construction over the next several months," said
Michelle Meyer, economist at Barclays Capital in New York.
November's housing starts were revised upwards to 580,000 units from the previously
reported 574,000 units.
A separate report from the Labor Department showed producer prices rose 0.2 percent
last month as food prices surged, and recorded their largest year-on-year gain
since October 2008.
U.S. stock index futures held losses, while government bond prices were steady
at higher prices. The U.S. dollar was firmer against the euro.
Groundbreaking activity dropped a record 38.8 percent to an all-time low of 553,000
units for the whole of 2009.
Starts for single-family homes fell 6.9 percent last month to an annual rate
of 456,000 units after rising 4.0 percent in November. Groundbreaking for the
volatile multifamily segment rose 12.2 percent to a 101,000 unit annual pace,
after surging 69.8 percent in November.
Housing is on the mend after a three-year slump and new home construction contributed
to economic growth in the third quarter of 2009 for the first time since 2005.
However data such as pending home sales and homebuilder sentiment have hinted
at potential weakness in a sector whose collapse triggered the most brutal U.S.
recession since the Great Depression of the 1930s.
Even though producer prices rose for a third straight month, inflation pressures
remain tame.
Muted inflation pressures and the unsettled housing market should
allow the Federal Reserve to honor its pledge to keep overnight
lending low for "an extended
period." Officials next meet on January 26-27 to deliberate
on monetary policy.
New building permits, which give a sense of future home construction, rose 10.9
percent to 653,000 units last month, the highest since October 2008.
That compared to analysts' forecasts for 590,000 units. For the whole of 2009,
permits dropped 36.9 percent, the department said.
The inventory of total houses under construction dropped 3.8 percent to a record
low of 511,000 units last month, while the total number of buildings authorized
but not yet started rose 8.4 percent to 95,800 units.
In a separate report, the Mortgage Bankers Association said demand for U.S. home
loans rose last week for the third straight week as a drop in mortgage rates
to a one-month low stoked refinancing.
The Mortgage Bankers Association's index of total home loan applications rose
9.1 percent to a seasonally adjusted 575.9. The increase was driven by a 10.7
percent jump in the refinancing index, while home purchase loan demand rose 4.4
percent to 223.0.
Average 30-year mortgage rates dropped to 5 percent last week, the group said.
Source:
Reuters
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Statement from NAHB Chairman Joe Robson on FHA Policy Changes Wednesday,
January 20, 2010 Joe
Robson, chairman of the National Association of Home Builders (NAHB)
and a home builder from Tulsa, Okla., issued
the following statement on the new Federal Housing Administration (FHA)
policy changes announced today:
"NAHB
understands the need for the FHA to respond to developments in its
portfolio that
will enable the agency to continue to operate on
a sound financial footing. At the same time, the FHA is an indispensable
source of financing for America's home buyers and must fulfill this vital
mission at this fragile juncture. NAHB looks forward to working with
the agency to ensure that it maintains its central role in the nation's
housing finance system and provides homeownership opportunities for millions
of creditworthy borrowers."
Source: NAHB
Harder
to Get an Uncle Sam Mortgage
Tuesday, January 19, 2010
It's going
to be harder to get a government-backed mortgage from now on.
Looking to shore up its weakening finances, the Federal Housing Administration
is set to announce stricter standards on Wednesday.
The agency, which insured nearly a third of new mortgages in 2009, will
increase the premium it charges for its mortgage insurance and require
those with weaker credit scores to come up with larger downpayments.
The FHA will also reduce the amount of money a seller can provide a homebuyer
for closing costs, as well as tighten its enforcement of lenders.
"
Striking the right balance between managing the FHA's risk, continuing
to provide access to underserved communities, and supporting the nation's
economic recovery is critically important," FHA Commissioner David
Stevens said in a statement. "Importantly, FHA will remain the largest
source of home purchase financing for underserved communities."
FHA loans have skyrocketed in popularity during the mortgage crisis since
the agency backstops banks if borrowers stop paying. But housing experts
are growing increasingly concerned about the agency's ability to handle
rising numbers of defaults. (Cash cushion shrivels for FHA.)
In November, the agency reported that its reserve fund has dropped to
.53% of its insurance guarantees, well below the 2% ratio mandated by
Congress and the 3% ratio it had last fall. The fund covers losses on
the mortgages the agency insures.
Federal housing officials, who took several steps to shore up the agency's
finances last year, promised to do more. The new announcement is the
latest set of changes to FHA policies.
Source:
CNNMoney
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High Unemployment Levels Put Housing on Slow Growth Track
Tuesday,
January 19, 2010 The
end of the economic recession along with the continuation of low mortgage
interest rates and stabilizing housing prices
will result in growth in the nation's housing market this year, according
to economists speaking at the International Builders' Show in Las Vegas
today. But improvements will come slowly, they said, as high unemployment
levels continue to discourage consumers and push home foreclosures higher.
"The stage is set for the consumer to return," said
David Crowe, chief economist of the National Association of Home Builders
(NAHB),
and because of the slow pace of the recovery home builders will profit
from generally low inflation in building materials prices and wages.
The economists said they expect the extension and expansion of the home
buyer tax credit to generate some sales activity in the early months
of the year as economic growth gradually kicks in and bolsters an increase
in housing activity.
However,
Crowe warned that this remains "a cautionary period" for
housing, largely because of the discouraging level of joblessness, which
he forecast will peak at 10.2 percent in the first quarter and remain
elevated, exceeding 8 percent at the end of 2011.
The inability
of builders to obtain financing for new residential development is
also "a significant retardant to recovery," Crowe
said.
NAHB is forecasting 697,000 total housing starts in 2010, up 25.6 percent
from an estimated 555,000 units last year. However, this year's recovery
will occur entirely in the single-family sector, where starts are forecast
to rise 37.7 percent from 443,000 last year to 610,000, he said. Suffering
from an acute shortage of available financing, multifamily starts are
expected to lose further ground in 2010, slumping to 87,000 units, down
22.3 percent from last year's 112,000 level. In 2008, 285,000 multifamily
units were started, which is near the level that is needed to keep the
supply in balance with demand.
Just as
it was following the recession of 2001, David Berson, chief economist
and strategist
for the PMI Group, predicted that the performance
of the job market will be disappointing, with small businesses, a key
engine of economic growth, not showing strong signs of expanding or hiring.
Normally, steep downturns are followed by a period of vigorous growth,
he said, but "it's different this time."
The anemic
economic recovery and job market will hold down housing, he said, but
they will
delay a decision by the Federal Reserve to begin
raising interest rates. "It's unlikely that the Fed will raise the
federal funds rate until the job market gets stronger," he said.
The consensus of the economists was that mortgage interest rates were
headed higher, but were unlikely to exceed six percent in the next year
or two.
Berson noted that home prices have stabilized over the past six to nine
months, but he said they are likely to register more declines this year
as foreclosures, a lagging economic indicator, continue to rise. However,
the extent of the price decline will depend on how many foreclosed homes
come immediately back onto the market. To avoid depressing home prices,
the servicers who own these properties have delayed returning them to
the market.
"A big price decline could happen," he said, "but servicers
probably will behave as they have in the past, not dumping new foreclosures
on the market." However, this means that it will take longer for
housing to start showing price gains again. Normally, housing should
be appreciating by 4 percent annually, he said, but it could take a few
years to reach that point.
Frank Nothaft, chief economist at Freddie Mac, said that a gradual upward
drift in mortgage rates, especially during the second half of 2010, would
reduce the refinancing of single-family mortgages by about 10 percent
this year over last. Home purchase originations, on the other hand, are
headed up, he said, thanks to a 10 percent to 15 percent increase in
home sales.
Nothaft said that FHA and VA financing are headed for an even larger
market share than last year's, accounting for 25 percent of originations
in 2010, or maybe a bit higher.
Mortgage delinquencies haven't peaked yet, he added, and are unlikely
to do so until several months after unemployment hits its peak. The number
of mortgages on which home owners are behind by 90 days or more will
probably continue to grow into the second half of 2010.
With fixed-rate mortgages at the end of last year at their lowest levels
in 50 years, adjustable rate mortgages haven't been much in use, Nothaft
said, commanding a measly five percent market share in 2009. However,
there will be some gradual pickup in the number of home buyers using
ARM s this year, with their share rising into the five percent to 10
percent range.
Panelists noted that there will be large regional differences in the
pace of the housing recovery that is now beginning. With lower unemployment
than elsewhere and no major overhangs in the housing inventory, the Great
Plains down through Texas, and the Southeast, with the exception of Florida
and Atlanta, will be doing better than the country as a whole, said Berson.
Berson forecast 675,000 housing starts for 2010; Nothaft put them in
the 770,000 to 780,000 range.
Source: NAHB
Builder
Confidence Declines in January Tuesday,
January 19, 2010 Builder
confidence in the market for newly built, single-family homes declined
one point to 15 in January on continuing
concerns about the poor job market and large number of foreclosed homes
for sale, according to the latest National Association of Home Builders/Wells
Fargo Housing Market Index (HMI), released today.
"At this point, home builders have done everything we possibly
can to set the stage for a housing recovery - we've thinned our inventories,
we've kept new construction to a minimum, and we've fought for and achieved
a great new buying incentive with the extension and expansion of the
home buyer tax credit," said NAHB Chairman Joe Robson, a home builder
from Tulsa, Okla.
"We
stand poised and ready to deliver new homes as soon as our customers
are ready to
take advantage of the tax credit and other historically
good buying conditions in terms of interest rates, selection, and prices.
Yet builders also realize that factors beyond our control - including
consumer concerns about job security and competition from foreclosed
homes on the market - are still impeding demand for new homes at this
time."
"Home buying conditions have rarely been as good as they are right
now, but consumers are still waiting to see significant positive signs
of improvement in employment and confidence, and this is slowing buyers'
return to the market," agreed NAHB Chief Economist David Crowe. "Meanwhile,
competition from foreclosed homes is also severely impacting new-home
sales. That said, expected improvement in the job market this spring
will help propel the housing recovery as we head into the prime home
buying season."
Source: NAHB
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Apartments
Will Be in Short Supply in Coming Years According to Building Industry
Leaders Tuesday,
January 19, 2010 A
severe shortage of apartments is likely to result from the anemic pace
of multifamily rental property construction, according
to industry experts speaking at a press conference today at the National
Association of Home Builders' International Builders' Show® in
Las Vegas. New multifamily construction has been crippled by the credit
crisis, leaving the industry unable to gear up for the increased need
for market-rate and affordable apartments that is expected to accompany
economic recovery beginning next year. "We
desperately need lenders to begin financing apartment communities again," said
NAHB Chief Economist David Crowe. "The vacancy
rate for apartments is elevated now, but as the economy recovers and
jobs return, the people who've been doubling up with relatives and friends
will want a place of their own - and there may not be one available."
Industry leaders predict that with the two- to three-year timeline required
to build apartment communities, there will be a severe shortage of apartments
in the near future - at the same time that there will likely be a huge
need for them, according to demographers. A large number of Generation
Y professionals and newly formed households -for whom multifamily is
often the most attractive option - are expected to enter the housing
market soon. They are likely to find fewer market-rate and affordable
rental units to choose from, and higher rents due to increased demand.
Source: NAHB
2010 International Builders' Show to Showcase the Industry's
Largest Product Display
Tuesday,
January 19, 2010
Housing
professionals from across the country and abroad will convene at the
Las Vegas Convention Center in Las Vegas,
Jan 19-22, for the 2010 International Builders' Show (IBS), the housing
industry's largest annual trade show and exhibition. The National Association
of Home Builders (NAHB) event, held in one of the largest convention
centers in the country, will feature the most cutting-edge designs, technologies,
and products for all segments of the industry.
Source: NAHB
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First Multifamily
Buildings Achieve National Green Building Certification
Monday,
January 18, 2010
Two Tennessee condominium buildings have become the first recipients
of green multifamily certification under the National
Green Building Standard, the National Association of Home Builders announced
Monday.
The buildings were certified by the NAHB Research Center, a subsidiary
of NAHB.
The bronze-level certification was awarded to the first two buildings
completed in the Park Run community at McKay's Mill in Franklin, Tenn.
When completed, the development will comprise 23 buildings for a total
of 92 condominium homes. The Jones Company, a top-100 single-family builder,
also has certified dozens of single-family green homes.
"Green certification has value to all home owners, both single-family
and multifamily," said NAHB Chairman Joe Robson, a builder and developers
from Tulsa, Okla. "Growing numbers of today's home buyers want the
benefits of a home that's built with sustainability and energy efficiency
in mind."
The National Green Building Standard is a scoring tool and certification
protocol that assures projects have met stringent benchmarks in energy,
water and resource efficiency, indoor environmental quality and lot and
site design. In addition, the builder must provide education and a manual
for home owners to help ensure the home is operated and maintained to
retain its green advantages.
The standard was developed by NAHB and the International Code Council
and is the first such system to be approved by the American National
Standards Institute. It covers single-family homes, apartments and condos,
residential land development and home remodeling projects, and is administered
by the NAHB Research Center, which also accredits local verifiers around
the country.
"The National Green Building Standard provides a rigorous definition
of residential green construction, whether it be for single-family homes
or multi-story apartment buildings," said Michael Luzier, president
of the NAHB Research Center. "As the first and only existing national
green building rating system that can be used for every type of residential
project, the standard allows the Research Center to be a 'one-stop shop'
for builders, remodelers and developers who want third-party validation
for their green projects."
Source:
NAHB
Record 3
Million Households Hit With Foreclosure in 2009
Thursday, January 14, 2010
Almost 3 million homeowners received at least
one foreclosure filing during 2009, setting a new record for the number
of people falling behind on their mortgage payments.
RealtyTrac, the online marketer of foreclosed homes, reported that one
in 45 households -- or 2,824,674 properties nationwide -- were in default
last year. That's 21% more than in 2008, and more than double 2007's
total.
The dramatic, sustained increase occurred despite efforts, such as President
Obama's Home Affordable Modification Program, to reduce foreclosure filings.
"
As bad as the 2009 numbers are, they probably would have been worse if
not for legislative and industry-related delays in processing delinquent
loans," said RealtyTrac CEO James Saccacio in
a prepared statement.
There was at least one bright spot in the report: In spite of a 21% increase
in filings, the number of homes actually repossessed was 871,086 -- up
just 1.1% above 2008's total.
"
That was driven primarily by short-term factors: trial loan modifications,
state legislation extending the foreclosure process and an overwhelming
volume of inventory clogging the foreclosure pipeline," said
Saccacio.
Filings peaked in July with more than 361,000 homes receiving notices.
After that, filings dropped four straight months.
Much of that is attributable to the government-led efforts to modify
loans to make them affordable, though it is still uncertain whether the
efforts have forestalled -- or just delayed -- foreclosure.
By early December more than 680,000 borrowers had gotten temporary workouts
but only a few thousand had been permanently modified.
That leaves Saccacio a bit pessimistic about the future. "In the
long term, a massive supply of delinquent loans continues to loom over
the housing market," said Saccacio. "And
many of those delinquencies will end up in the foreclosure
process in 2010."
Source: CNNMoney
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Rates on
30-Year Home Loans Fall To 5.06 PCT
Thursday January 14, 2010
Rates for 30-year home loans edged lower for the second
straight week, a report said Thursday, but remained above last month's
record lows.
The average rate on a 30-year fixed mortgage was 5.06 percent this week,
down from 5.09 percent a week earlier, mortgage company Freddie Mac said.
Rates dropped to a record low of 4.71 percent in early December, pushed
down by an aggressive government campaign to reduce consumers' borrowing
costs, but then rose steadily for the rest of the month.
Freddie Mac collects mortgage rates on Monday through Wednesday of each
week from lenders around the country. Rates often fluctuate significantly,
even within a given day, often in line with long-term Treasury bonds.
The Federal Reserve is pumping $1.25 trillion into mortgage-backed securities
to try to bring down mortgage rates, but that money is set to run out
next spring. The goal of the program is to make home buying more affordable
and prop up the housing market.
While it's possible that the program could be extended, analysts believe
the Fed is reluctant to do so. "We believe that the bar for the
Fed's program extension is high," Credit Suisse mortgage strategist
Mahesh Swaminathan wrote Thursday.
The average rate on a 15-year fixed-rate mortgages fell to 4.45 percent,
down from 4.50 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.32 percent,
down from 4.44 percent a week earlier. Rates on one-year, adjustable-rate
mortgages rose to 4.39 percent from 4.31 percent.
The rates do not include add-on fees known as points. One point is equal
to 1 percent of the total loan amount.
The nationwide fee for loans in Freddie Mac's survey averaged 0.7 point
for 30-year loans, 0.6 point for 15-year and five-year loans and 0.5
point for one-year loans.
Source: Associated Press
Mortgage
Applications Rise in First Week of 2010
Wednesday, January 13, 2010
U.S. mortgage
applications rose in the first week of 2010, reflecting surging demand
for home refinancing loans as interest
rates dropped, industry data showed on Wednesday.
Demand for loans to purchase a home, however, only rose marginally. A
continuation of this trend would not bode well for the U.S. housing market,
which has been showing signs of stabilization but remains highly vulnerable
to setbacks.
The Mortgage Bankers Association (MBA) said its seasonally adjusted index
of mortgage applications, including both purchase and refinance loans,
rose 14.3 percent to 528.1 for the week of January 8. A year ago, the
index was at 1,324.8.
The four-week moving average, which smooths out volatile weekly figures,
was down 6.4 percent.
"
What makes the (applications) increase interesting is that nothing exceptional
occurred to prompt people to return to the market," said Bob Walters,
chief economist at Quicken Loans in Livonia, Michigan.
"
In fact, this may be indicative of the ebb and flow we can expect to
see as the market continues to try and find its footing," he said.
The MBA said borrowing costs on 30-year fixed-rate mortgages, excluding
fees, averaged 5.13 percent, down 0.05 percentage point from the previous
week which was the highest rate since late August.
Interest rates were above the year-ago level of 4.89 percent and an all-time
low of 4.61 percent set in March. The survey has been conducted weekly
since 1990.
The lowest mortgage rates in decades and high affordability helped the
market find some footing after a three-year slump.
Anthony Hsieh, founder and chief executive of loanDepot.com, a mortgage
lender licensed in 18 states, said tight lending standards are one of
the biggest obstacles now.
" I have been in the mortgage business for the past 25 years, and I have
never seen the industry as tight as it is today."
"
Once a borrower leaps over one hurdle in the loan application process
they face yet another hurdle. So it is as if they are participating in
some sort of triathlon," he said.
The MBA's seasonally adjusted purchase index, a tentative early indicator
of home sales, rose 0.8 percent to 213.7. The index of refinancing applications
increased 21.8 percent to 2,407.2.
The refinance share of mortgage activity increased to 71.5 percent of
total applications from 68.2 percent.
Cameron Findlay, chief economist at LendingTree.com in Charlotte, North
Carolina, said mortgage rates should rise sharply, reaching 6.20 percent
in the fourth quarter.
" A rate at or over 6 pct is above my tolerance level."
"
The housing market cannot afford to go beyond that level, and I am convinced
the Fed will take action to bring rates back down if they do," he
said.
Interest rates are expected to rise when the Federal Reserve stops at
the end of March its purchase of mortgage-related securities, which is
aimed at lowering borrowing costs.
U.S. residential mortgage originations will plunge 40 percent this year
to the lowest in a decade as home refinancing demand sinks with rising
mortgage rates, the MBA said in its annual forecast on Tuesday.
The MBA said fixed 15-year mortgage rates averaged 4.45 percent, down
from 4.62 percent the previous week. Rates on one-year ARMs increased
to 6.83 percent from 6.42 percent.
Source:
Reuters
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Job
Picture Gets a Little Bit Brighter
Wednesday, January
6, 2010
In some
welcome news on the job front, the pace of U.S. job losses eased in
December, according to two reports
released Wednesday.
Automatic Data Processing (ADP, Fortune 500), a payroll-processing firm,
said private-sector employers cut 84,000 jobs in December, the fewest
since March 2008.
It was the ninth straight month that job losses narrowed from the previous
month. The number of cuts in November was revised down to 145,000 from
the previously reported 169,000.
Economists surveyed by Briefing.com had forecast a loss of 75,000 jobs
in December.
"
We're moving in the right direction, and I think we're only a month or
two away from reporting a positive top line number," said Joel Prakken,
chairman of Macroeconomic Advisers, in a conference call.
The service sector reported job growth for the first time in 21 months,
with an increase of 12,000 jobs in December, though Prakken said the
uptick could be because of an expansion in temporary employment.
The figure was offset by a loss of 96,000 in the goods-producing sector
and a drop of 43,000 manufacturing jobs.
"
We're still a little ways away from seeing an upturn in employment at
the country's plants and on construction sites," Prakken said.
He added that he expects the jobless rate to edge higher to about 10.25%
during the first quarter of this year and linger for the next two years,
hovering above 9% by the end of 2010 and higher than 8% at the end of
2011. Source:
CNNMoney
Uptick in Consumer Confidence
Tuesday, December 29, 2009
The Conference Board Consumer Confidence Index
increased for the second straight month to 52.9, up from 50.6 in November.
A baseline
index of 100 was set in 1985.
While confidence increased, the Conference Board's Present Situation
Index, however, declined to 18.8 from 21.2 in November -- a 26-year low.
"
A more optimistic outlook for business and labor market conditions was
the driving force behind the increase in the Expectations Index," said
Lynn Franco, director of the Conference Board Consumer
Research Center. Franco pointed out that expectations for
the short-term
future increased
to the highest level in two years.
" Regarding income, however, consumers remain rather pessimistic about
their short-term prospects, and this will likely continue
to play a key role in spending decisions in early 2010."
The closely watched Consumer Confidence Survey is based on a sample of
5,000 U.S. households for the New York-based Conference Board by research
firm TNS.
Source: Home Channel News
New Home Sales Decline
Wednesday, December
23, 2009
(Dec. 23) Sales of new single-family homes declined to a seasonally
adjusted annual rate of 355,000 in November, according to a report
released
Wednesday by the U.S. Commerce Department. The November pace is
down 11.3% from October, and down 9.0% from November 2008.
The report follows by a single day the glowing existing-home sales
report from the National Association of Realtors (NAR). The rate
of existing-home
sales in November was up 44.1% from a year ago, and up 7.4% from
October, according to the NAR.
In today's report, the Commerce Department pointed to the median
sales price of new houses sold in November 2009 as $217,400, up from
$209,400
in October but down from $221,600 in November 2008.The seasonally
adjusted estimate of new houses for sale at the end of November was
235,000.
This represents a supply of 7.9 months at the current sales rate.
Source: Home Channel News
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Big Gain for Existing-Home Sales
Tuesday, December 22, 2009
Existing-home sales rose 7.4% to a seasonally
adjusted annual rate of 6.54 million units for November, according to
a report released
today by the National Association of Realtors (NAR).
The figure is 44.1% higher than the 4.54 million-unit pace from November
last year and shows existing-home sales are at the highest level since
February 2007 when they hit 6.55 million.
The NAR’s chief economist, Lawrence Yun, said that the rise was
expected.
“
This clearly is a rush of first-time buyers not wanting to miss out on
the tax credit, but there are many more potential buyers who can enter
the market in the months ahead,” he said. “We expect a temporary
sales drop while buying activity ramps up for another surge in the spring
when buyers take advantage of the expanded tax credit, which hopefully
will take us into a self-sustaining market in the second half of 2010.
In all, 4.4 million households are expected to claim the tax credit before
it expires, and balance should be restored to the housing sector with
inventories continuing to decline.”
The NAR also reported the national median existing-home price for all
housing types was down 4.3% from November 2008 to $172,600. The price
was up slightly over October's average of $172,200.
The total housing inventory fell 1.3% to 3.52 million existing homes
available for sale. That figure represents a 6.5-month supply at the
current sales pace, down from a 7-month supply in October. Raw unsold
inventory is down 15.5% from last year, representing the lowest supply
of homes on the market since April 2006 when it was at a 6.1-month supply.
“
Nearly all markets experienced a solid sales gain from one year ago,” Yun
said. “The only markets with measurably lower sales were in San
Diego, Riverside and Sacramento, where inventory shortages for lower
priced homes are limiting sales.”
Regionally, existing-home sales in the Northeast rose 6.6% in November
to an annual level of 1.13 million, up 52.7% from last year. Sales in
the Midwest rose 8.4% to 1.55 million, up 53.5% from last year. In the
South, sales rose 4.8% to 2.39 million, up 44.8 % from last year, and
the West saw sales up 10.6% to 1.46 million, up 4.1% from November 2008.
Source: Home Channel News
Business Spending Holds Back Economic Growth
Tuesday, December 22, 2009
The economy grew at a much slower pace than previously
thought in the third quarter, restrained by weak business investment
and a slightly more aggressive liquidation of inventories, data showed
on Tuesday.
The Commerce Department's final estimate showed gross domestic product
grew at a 2.2 percent annual rate instead of the 2.8 percent pace it
reported last month. Analysts polled by Reuters had forecast the report
to show GDP, which measures total goods and services output within U.S.
borders, unrevised at a 2.8 percent growth rate in the third quarter.
It was still the fastest pace since the third quarter of 2007 and ended
four straight quarters of decline in output. The resumption of growth
in the July-September period probably ended the most brutal recession
since the 1930s.
Growth was boosted by government stimulus programs, including the popular
cash for clunkers and tax credit for first-time home buyers, and debate
continues to rage over the sustainability of the recovery once government
support wanes.
U.S. financial markets were little moved by the report.
Data such as retail sales, business inventories and the trade balance
strongly indicate the economic growth pace picked up speed in the fourth
quarter.
Economists' forecasts for fourth-quarter GDP growth have ranged
from 4.0 percent to 4.5 percent. Last week, the Federal Reserve
gave a
cautiously upbeat assessment of the economy and promised to hold
overnight lending
rates near zero for an "extended period" to aid the
economic recovery.
"
I expect the fourth quarter (GDP) will still be strong with retail sales
better-than-expected, but business spending is still a wildcard. There
is a lot of cash, but I'm not sure if the business spending is there
yet," said Christopher Low, chief economist with FTN Financial
in New York.
Business spending in the third quarter was weaker than the government
had estimated last month. Business investment fell at a 5.9 percent rate
instead of 4.1 percent, the department said.
Source: Reuters
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November Home Sales Soar 7.4 Percent
Tuesday, December 22, 2009
Home resales surged last month to the highest level
in nearly three years, reflecting an extraordinary level of federal support
that has pulled the housing market back from the worst downturn since
the Great Depression.
Buyers were racing to complete their sales before the original expiration
date of a tax credit for first-time buyers that was scheduled to expire
Nov. 30. Last month, Congress decided to extend and expand the credit
to ensure the housing market could sustain its recovery.
The Realtors estimated that about 2 million homebuyers have taken advantage
of the credit so far and forecasts that another 2.4 million will use
it by the middle of next year. First-time buyers made up about half of
all transactions last month, driving sales up 44 percent above last year's
levels, a record jump.
Sales are now up 46 percent from the bottom in January, but down 10 percent
from the peak more than four years ago.
The median sales price was $172,600, down 4.3 percent from a year earlier,
and up 0.2 percent from October.
"
Things are stabilizing," said Pete Flint, chief executive of real
estate Web site Trulia.com. "There is a significant amount of buyer
interest out there."
November sales rose 7.4 percent to a seasonally adjusted annual rate
of 6.54 million, from a downwardly revised pace of 6.09 million in October.
Sales had been expected to rise to an annual pace of 6.25 million, according
to economists surveyed by Thomson Reuters.
The inventory of unsold homes on the market fell about 1 percent to 3.5
million. That's a healthy 6.5 month supply at the current sales pace,
the lowest level in three years.
Besides the existing tax credit of up to $8,000 for first-time buyers,
homeowners who have lived in their current properties for at least five
years can now claim a tax credit of up to $6,500 if they relocate. To
qualify, buyers must sign a purchase agreement by April 30.
Postponing the deadline could mean sales will drop during the winter
months and recover in the spring.
"
Buyers have no sense of urgency now," said Gary DeRosa, an agent
with ZipRealty Inc. in Seattle.
Source: Associated Press
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Senate Health Care Bill Threatens Home Building Industry
Monday, December 21, 2009
In a rush to pass a massive health care overhaul
before Christmas, Senate Democrats have included a last-minute provision
targeting the construction industry that is certain to derail the fragile
housing recovery and threaten the solvency of countless small home building
firms.
In order to find the 60 votes needed to pass health care reform, a provision
was slipped into the health care bill that unfairly targets small construction
industry firms by mandating that they provide health insurance if they
employ more than five workers. That is the same mandate required for
big businesses. Meanwhile, all other small businesses - with the exception
of the construction industry -- would be exempt from providing mandatory
health coverage if they employ 50 workers or less.
"This narrow provision is an unprecedented assault on the construction
industry and unjustly targets an industry trying to keep its doors open
during the worst housing downturn since the Great Depression," said
NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "If this
provision were to be enacted into law, it would prove to be catastrophic
for the home building industry. In short, this is a true jobs killer.
Thousands of small builder firms struggling to stay afloat could go under.
We strongly urge the Senate to reconsider and pull this onerous provision
that threatens the viability of small home builders across the nation." Source: Business Wire
Jobless Claims Up, But Leading Indicators Improve
Thursday, December 17, 2009
The number of U.S. workers filing new applications
for jobless insurance unexpectedly rose last week, but a gauge of future
economic activity increased for the eighth month in a row, pointing to
a slow economic recovery where employment looms as the dominant concern.
A separate report from the Philadelphia Federal Reserve Bank also gave
hints of future strength, showing that factory activity accelerated rapidly
in the U.S. Mid-Atlantic region in December, beating markets forecasts
for growth to slow slightly.
Initial claims for U.S. state unemployment benefits climbed 7,000 to
a seasonally adjusted 480,000 in the week ended December 12 from a slightly
downwardly revised 473,000 in the prior week, the Labor Department said
on Thursday. It was the second straight week initial claims rose.
Analysts polled by Reuters had forecast jobless claims falling to 465,000
from a previously reported 474,000. The weekly claims data covers the
December payrolls survey week.
Meanwhile, the U.S. Conference Board's Leading Economic Index increased
0.9 percent in November to 104.9 after rising an unrevised 0.3 percent
in October, boosted by improving financial conditions, employment and
housing, the private research group said.
Conference Board Economist Ken Goldstein said the employment level held
steady in November, marking the first month since December 2007 when
the country's labor conditions did not drag on the index.
U.S. stock indexes trimmed losses after the index was released, but remained
close to session lows, while U.S. Treasury debt prices pared gains slightly
and the U.S. dollar was little changed after a sharp overnight rise.
The Federal Reserve on Wednesday left overnight lending rates
unchanged near zero and renewed its promise to hold them
low for an "extended
period." The U.S. central bank noted that the labor
market deterioration was abating, though companies remained
reluctant
to add to payrolls.
Source: Reuters
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Home Construction Rebounds from 6-Month Llow
Wednesday, December 16, 2009
Home building rebounded from a six-month low
in November, with improvement in new home construction in all sections
of the nation, according to a government report issued Wednesday.
Construction of new homes rose to an annual rate of 574,000 during the
month, 8.9% above the revised October rate of 527,000. The rate was still
12.4% below the 655,000 rate during November 2008.
A consensus estimate of economists surveyed by Briefing.com expected
574,000 housing starts during the month.
New construction jumped the most in the Northeast, with a 16.4% rise
from the previous month. Housing starts rose 12.3% in the South, 3% in
the Midwest and 1.9% in the West.
The number of building permits issued during November rose to a seasonally
adjusted annual rate of 584,000. That was 6% above the revised October
rate of 551,000, and 7.3% below the November 2008 estimate of 630,000.
One reason for the October downturn was concern that an $8,000 homebuyer's
tax credit -- part of the Obama administration's economic stimulus --
was going to expire on Dec. 1.
At the start of November, the credit was extended through the end of
June and expanded to apply to more buyers. But David Crowe, chief economist
at National Association of Homebuilders, said the bill hasn't had a chance
to impact the housing market.
"
This is a recovery from the prior month," said. "But we're
still seeing a tapering off toward the end of the year. During the middle
of this year, we saw a nice buildup through the late summer as a result
of the homebuyer's tax credit."
Housing starts peaked this year in July with an annual rate of 593,000.
"
We're in a bit of a lull, but the new (extended) credit will have an
impact as we move into 2010 and consumers plan for that credit availability,
and builders begin to answer expected demand in the spring," he
said.
Crowe added that the tight credit market has also made it difficult for
builders to borrow money to start building projects.
"
Builders are ready to begin restocking their inventories to prepare for
the selling season, but they can't get production credit from the banks," Crowe
said. "Banks are effectively making carte blanche decisions without
recognizing projects that are in decent markets with viable futures."
Source: CNNMoney.com
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New Home Energy-Efficiency Incentive Could Boost Recover, Says NAHB
Tuesday, December 15, 2009
The National Association of Home Builders
today commended President Barack Obama as he proposed a new initiative
to create
jobs and make today's homes more energy efficient.
In a speech Tuesday morning at a Home Depot in the suburban Washington,
D.C. area, the president called on Congress to extend energy-efficiency
tax credits for home owners as part of an $8 billion effort to reduce
energy use.
"This is the kind of thinking that is going to get America back
to work - and make a big difference in many home owners' monthly utility
bills," said NAHB Chairman Joe Robson, a builder and developer in
Tulsa, Okla.
NAHB estimates that
11,000 jobs, $527 million in wages and salaries, and $300 million in
business income are generated by every $1 billion
in new remodeling and home improvement activity. "That's a huge
impact just in the short run. And in the long run, the energy savings
for participating home owners can be quite significant," Robson
said.
"
This also bolsters a very important message and something we have been
saying for years: If we really want to make an impact on the nation's
energy use, we need to take significant steps to make the existing
housing stock more efficient," Robson said.
He pointed out that state and local home builder associations affiliated
with NAHB can be instrumental in the effort to weatherize older homes
and make them more energy efficient.
For example, the Builders Association of Minnesota served as the conduit
for federal stimulus program funds provided to the state for its energy-efficiency
programs. The association trained nearly 1,000 remodelers and other residential
contractors and funneled the money to 1,300 Minnesota home owners to
help them make needed improvements.
Minnesota home owners got extra incentives for choosing projects like
attic insulation, which some consumers don't do because it's something
that's not immediately visible, but when combined with incentives can
bring a payback on utility bills within a year or two, depending on the
climate.
"President Obama is right that these kinds of projects don't seem
'sexy,' but saving money is very attractive, and so is providing jobs," Robson
said.
"These are efforts that the Administration should consider on a
much larger scale," he continued. "They provide employment,
stimulate the economy and help us reduce our dependence on fossil fuels
- that's three great outcomes. NAHB can help make this happen all over
the country."
Last month, the White
House Council on Environmental Quality invited NAHB to explain how
home builders, product manufacturers and remodelers
can be part of the Administration's "Recovery Through Retrofit" solution
with programs like Minnesota's.
"We're anxious to help with these efforts," Robson said. "It's
what our members do, and do well - and they all want to get back to work."
Source:
NAHB
Builder Confidence Edges Down in December
Tuesday, December 15, 2009
Builder confidence in the market for newly built,
single-family homes receded one point to 16 in December as continued
weakness in the economy and job markets weighed on consumers' potential
home buying plans, according to the latest NAHB/Wells Fargo Housing
Market Index (HMI), released today.
"From an affordability standpoint, rarely has there been a better
time in history to purchase a home, thanks to record low interest rates,
attractive prices, and of course the recent extension and expansion of
the home buyer tax credit," said Joe Robson, Chairman of the National
Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. "However,
builders are not seeing the full impact of these conditions on buyer
demand, partly because awareness of the latest incentives is still building,
and partly because of concerns about job security and other economic
woes."
"As we anticipated, this is shaping up to be a bumpy recovery period
for the housing market," noted NAHB Chief Economist David Crowe. "While
some families may be just starting to factor the expanded tax credit
into their potential home buying plans, many are hesitating because of
the poor economy. At the same time, tight lending conditions for both
consumers and home builders continue to pose considerable obstacles on
the road to a sustained housing and economic recovery." Source: NAHB
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Foreclosure Plague Slowing: Filings Fall 8%
December 10, 2009
Foreclosure filings fell by 8% in November,
making it the fourth consecutive month of improvement in the housing
market.
There were 306,627 filings last month, according to RealtyTrac, an online
marketer of foreclosed properties. That decline follows a 3% drop in
October, 4% in September and 1% in August.
"
Loan modifications and other foreclosure prevention efforts, along with
the recently extended and expanded homebuyer tax credit, are keeping
a lid on the most visible symptoms of the nation's ailing housing market
-- foreclosures and home value depreciation," RealtyTrac CEO James
Saccacio said in a prepared statement.
However, while there are signs of improvement, the industry has yet to
turn around: Foreclosure filings were still a lofty 18% above November
2008's levels.
Source: CNNMoney.com
Bernanke Says Economy Improving
Monday, December 7, 2009
Federal Reserve Chairman Ben Bernanke on Monday
said the U.S. economy's recovery remained fragile and unemployment may
be high for some time, cooling anticipation of an early increase in U.S.
interest rates. Three days after news of a surprise fall in the jobless
rate prompted investors to speculate the Fed might move more quickly
to raise rates than had been expected, Bernanke said the Fed -- the U.S.
central bank -- was sticking to its pledge to hold benchmark borrowing
costs at exceptionally low levels for an "extended period."
"
We still have some ways to go before we can be assured that the recovery
will be self-sustaining," he told the Economic Club of Washington. "Also
at issue is whether the recovery will create the large number of jobs
that will be needed to materially bring down the unemployment rate."
A report on Friday showed the U.S. labor market last month turned in
its best performance since the economy fell into recession two years
ago as the unemployment rate receded slightly from a 26-1/2-year high
and job losses slowed sharply.
The data led investors to ramp up bets benchmark U.S. rates would rise
by the middle of next year, lifting the dollar to its biggest gain in
nearly a year.
However, Bernanke on Monday suggested the Fed's policy-setting Federal
Open Market Committee (FOMC), which meets next week to debate policy,
would bide its time to let the recovery gather strength. His comments
drove the dollar and prices for U.S. government bonds lower, while offering
temporary support to stocks.
"
Right now we are still looking at the extended period given that conditions
remain -- low rates of (resource) utilization, subdued inflation trends,
and stable long term inflation expectations," he said. "That
remains where we are."
This view was echoed by another top Fed official, New York Federal Reserve
Bank President William Dudley, speaking at Columbia University in New
York on Monday evening.
"
The recession now appears to be over, but the economy is still weak and
the unemployment rate is much too high," Dudley said.
" These circumstances underpin the FOMC's commitment to keeping short-term
rates exceptionally low for an extended period."
Source: Reuters
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Unexpected
Drop in Jobless Rate Sparks Optimism
Friday, December 4, 2009
A surprising drop in the unemployment rate and far
fewer job losses last month cheered investors Friday and raised hopes
for a sustained economic recovery.
The rate unexpectedly fell to 10 percent, from 10.2 percent in October,
as employers cut the fewest number of jobs since the recession began.
The government also said 159,000 fewer jobs were lost in September and
October than first reported.
If part-time workers who want full time jobs and laid-off workers who
have given up looking for jobs are included, the so-called underemployment
rate also fell, to 17.2 percent from 17.5 percent in October.
The better-than-expected figures provided a rare dose of good news for
a labor market that's lost 7.2 million jobs in two years. Still, the
respite may be temporary.
Job creation is expected to remain far too weak in coming months to absorb
the 15.4 million unemployed people who are seeking work -- and the 11.5
million others who are underemployed. As more people begin seeking work,
the jobless rate is likely to resume rising.
The report offered evidence of how hard it remains to find a job: The
number of people unemployed for at least six months rose last month to
5.9 million. And the average length of unemployment has risen to more
than 28 weeks, the longest on records dating from 1948.
Even counting last month's decline, the unemployment rate has more than
doubled since the recession began in December 2007, when it stood at
4.9 percent. And the underemployment rate has jumped to 17.2 percent
from 8.7 percent.
"
We will need very substantial job growth to get unemployment lower, especially
when the labor force ... starts growing again," said Lawrence Mishel,
president of the Economic Policy Institute, a liberal think tank.
Still, economists and investors drew hope from the Labor Department report.
It said the economy shed 11,000 jobs last month -- a sharp improvement
from October's revised total of 111,000. And it was much better than
the 130,000 Wall Street economists had expected.
Source: Associated Press
Mortgage Applications Edge Higher, Rates Hit 6 Month Low
Wednesday, December 2, 2009
U.S. mortgage applications nudged higher last
week, data from an industry group reported on Wednesday, as consumers
showed
a subdued reaction to the lowest interest rates in six months.
The Mortgage Bankers Association said interest rates on 30-year fixed-rate
mortgages, the most widely used loan, fell for a sixth straight week,
remaining below the 5 percent level, widely viewed as a psychological
tipping point.
Attractive rates coupled with high affordability have been positives
for the U.S. housing market, which has been showing signs of stabilization.
Sales have surged in recent months as buyers scrambled to take advantage
of the government's first-time home buyer tax credit.
Source: Reuters
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Job
Picture: Signs of Improvement
Wednesday,
December 2, 2009
The pace of U.S. job losses slowed in November,
according to two reports released Wednesday.
Automatic Data Processing (ADP, Fortune 500), a payroll-processing firm,
said private-sector employers cut 169,000 jobs in November.
It was the eighth month in a row that the number of job cuts fell from
the month before. The number of cuts in October was revised down to 195,000
from the previously reported 203,000.
Economists surveyed by Briefing.com had forecast a loss of 150,000 jobs
last month.
"
Looking forward, we expect several months of declines," said Joel
Prakken, chairman of Macroeconomic Advisers, in a conference call. "But
the losses will get smaller and we should see the first positive number
in February's data."
The U.S. economy will not return to "full employment," defined
as 5% unemployment, until as late as 2014, Prakken said.
Prakken also addressed the jobs forum slated for Thursday, in which President
Obama will meet with labor representatives, financial experts and other
business leaders to discuss the continued problems with unemployment.
"
There are two ways you can go: hope more government spending translates
to employment, or give tax incentives for hiring," Prakken said.
Both options are tricky, Prakken said, and "he's not a huge fan" of
either avenue because to improve the labor market most of the hiring
will have to be in the private sector.
"
Sadly, I don't think much can be done to keep unemployment from peaking
at 10.4% or 10.5%," Prakken said.
Source: CNNMoney.com
Pending Home Sales Rise Again
Wednesday, December 2, 2009
The National Association of Realtors reported
that the Pending Home Sales Index came in at 114.1 for the month of October,
up
31.8%
from the October 2008 reading.
That's the biggest year-over-year increase since the NAR launched the
index back in 2001. The October number scored another record: nine months
in a row of month-over-month increases. The Index rose from 110.0 in
September.
The record high remains 115.2, recorded in March 2006.
It's too early to celebrate, according to the economists at the NAR.
The weak job market continues to slow the recovery process, according
to Lawrence Yun, chief economist for the NAR.
“
Still, as inventories continue to decline and balance is gradually restored
between buyers and sellers, we should reach self-sustaining housing conditions
and firming home prices in most areas around the middle of 2010," he
said. "That would mean broad wealth stabilization for the vast number
of middle-class families."
The Pending Home Sales Index is a forward-looking indicator based on
contracts signed in October.
Source:
Home Channel News
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to top Housing Affordability Hovers Newar Record-High Level for Third Consecutive
Quarter Thursday, November 19, 2009
Nationwide housing affordability, bolstered by
affordable interest rates and low house prices, hovered for the third
consecutive quarter near its highest level since the series was first
compiled 18 years ago, according to the National Association of Home
Builders/Wells Fargo Housing Opportunity Index (HOI) released today.
The HOI showed that 70.1 percent of all new and existing homes sold
in the third quarter of 2009 were affordable to families earning the
national median income of $64,000, down slightly from a near-record 72.3
percent during the previous quarter and up from 56.1 percent during the
third quarter of 2008.
"At a time when housing is at its most affordable, we applaud the
recent actions taken by Congress and President Obama to stimulate housing
by extending the federal tax credit beyond its Nov. 30 deadline and expanding
it to a wider group of eligible home buyers," said NAHB Chairman
Joe Robson, a home builder from Tulsa, Okla. "With interest rates
now lower than last quarter, the tax credit will encourage even more
home buyers to enter the market and help stabilize housing and the economy
by creating new jobs, stimulating home sales, reducing foreclosures,
cutting excess inventories and stabilizing home prices."
Indianapolis was the most affordable major housing market in the country
during the third quarter, a position the metro area now has held for
17 consecutive quarters. Almost 95 percent of all homes sold were affordable
to households earning the area's median family income of $68,100.
Also near the top of the list of the most affordable major metro housing
markets were Youngstown-Warren-Boardman, Ohio-Pa., and three Michigan
metropolitan areas, Detroit-Livonia-Dearborn; Warren-Troy-Farmington
Hills; and Grand Rapids-Wyoming.
Five smaller housing markets posted even higher affordability scores
than Indianapolis, with Kokomo, Ind. outscoring all others. There, 96.7
percent of homes sold during the third quarter of 2009 were affordable
to median-income earners. Other smaller housing markets near the top
of the index included Springfield, Ohio; Bay City, Mich.; Mansfield,
Ohio; and Elkhart-Goshen, Ind.
New York-White Plains-Wayne, N.Y.-N.J., was the nation's least affordable
major housing market during the third quarter of 2009, the New York
metro area's sixth consecutive appearance at the bottom of the list.
Slightly more than 19 percent of all homes sold during the third quarter
were affordable to those earning the New York area's median income
of $64,800.
The other major metro areas near the bottom of the affordability scale
included San Francisco; Honolulu; Santa Ana-Anaheim-Irvine, Calif.; and
Nassau-Suffolk, N.Y.
San Luis Obispo-Paso Robles, Calif. was the least affordable of the
smaller metro housing markets in the country during the third quarter.
Others near the bottom of the chart included Ocean City, N.J.; Santa
Cruz-Watsonville, Calif.; Santa Barbara-Santa Maria-Goleta, Calif.; and
Brownsville-Harlingen, Texas.
Source: NAHB
One in 7 U.S. Mortgages Foreclosing or Delinquent
Thusday, November 19, 2009
A record one in seven U.S. mortgages were in foreclosure
or at least one payment past due in the third quarter, according to fresh
data signaling the recovery in the housing market will be tepid at best.
U.S. mortgage delinquency rates and the percentage of loans that entered
the foreclosure process also jumped to records from July to September,
the Mortgage Bankers Association said on Thursday.
Rising job losses were behind the increasingly bleak portrait of the
housing market in a trend that will continue into next year, the group
said in data that adds to recent evidence of a still-struggling housing
market.
Housing and related business account for about 20 percent of the economy
and recovery is essential to bring unemployment down from a 26-1/2-year
high and kick-start economic growth.
Yet record foreclosures will add to the growing supply of unsold homes,
sapping the housing market as it attempts to recover from the worst slump
since the Great Depression.
The MBA said the percentage of loans in foreclosure rose to 1.42 percent,
from 1.36 percent in the second quarter and 1.07 percent in the third
quarter of 2008.
"
Foreclosures remain the biggest hurdle to the housing recovery," said
Michelle Meyer, economist at Barclays Capital in New York.
" Foreclosures will be worse in the first part of 2010 and we do not see
a peak in foreclosures until the middle of next year."
Source: Reuters
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Connections Builders with New Financing Sources at the 2010 Internation
Builders
Show®
Thursday, November 19, 2009
Wall Street and Main Street will come together
at the International Builders' Show® (IBS) this January, thanks
to an exciting new offering called the Partnership Pavilion that is
being developed by the National Association of Home Builders (NAHB).
"The severe lack of available credit for acquisition, development
and construction (AD&C) financing constitutes a significant threat
to thousands of home building and development companies, as well as to
the immediate and long-term future of the housing industry," said
NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "Given
the current situation, an innovative approach was called for to help
our members find new sources of debt and equity financing while reinvigorating
the traditional sources of housing credit, and that is the aim of the
Partnership Pavilion.
"NAHB members build roughly 80 percent of all new housing in this
country every year, and about 95 percent of them are the key decision-makers
within their business - including presidents, CEOs, owners and managing
partners," Robson continued. "Many of them are already planning
to travel to the International Builders' Show (IBS), which is the largest
and best-attended annual building industry tradeshow in this country.
It just makes sense to provide a confidential setting within that venue
for such professionals to meet one-on-one with potential new backers
for their projects."
Source: NAHB
Weak Home Building a Drag on Economic Recovery
Wednesday, November 18, 2009
The budding economic recovery is getting little help
from the home building industry, which normally creates jobs and boosts
growth as a recession ends.
Construction of homes unexpectedly plunged last month to its lowest point
since April, the Commerce Department said Wednesday. The weak figures
show that builders still lack confidence that buyers can soak up the
glut of unsold homes already on the market -- a supply magnified by a
record number of home foreclosures.
The figures also illustrate how much the fledgling recovery depends on
government support. Builders broke ground on fewer homes in part because
of uncertainty in October about whether Congress would extend a tax credit
for homebuyers. Earlier this month, lawmakers renewed the credit and
extended it to more buyers.
Even with government aid, the weakness of the housing sector is dragging
on the recovery.
"
It will take a while before residential construction begins to contribute
meaningfully to growth," Jennifer Lee, an economist at BMO Capital
Markets, wrote in a research note.
The sluggish recovery is also holding down inflation. While consumer
prices edged up faster than expected in October, they remain lower than
they were a year ago. And inflation is expected to remain subdued.
The Labor Department said consumer prices rose 0.3 percent in October,
a bit more than the 0.2 percent economists had expected. Core inflation,
which excludes energy and food, rose 0.2 percent, compared with analysts'
expectation for a 0.1 percent rise.
The higher figure was driven by another increase in energy prices and
the biggest jump in new car prices in 28 years.
The report on home construction said building of homes and apartments
fell 10.6 percent in October to a seasonally adjusted annual rate of
529,000, from an upwardly revised 592,000 in September. Economists polled
by Thomson Reuters had expected a pace of 600,000.
Applications for building permits, a gauge of future activity, fell 4
percent to an annual rate of 552,000 units. That was the lowest since
May and missed analysts' expectations of 580,000. But permits for single-family
homes fell only 0.2 percent.
The National Association of Home Builders said this week that its housing
market index remained unchanged in November, reflecting a cautious outlook
from residential developers as they waited to learn the credit's fate
Source: Associated Press
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to top U.S. Inflation Edges Up, Housing Starts Fall Sharply
Wednesday, November 18, 2009
Construction of new homes in the United States
fell sharply last month, showing potential weakness in the economy's
recovery, while consumer prices rose slightly more than expected.
The Commerce Department said on Wednesday housing starts dropped 10.6
percent to a seasonally adjusted annual rate of 529,000 units, the lowest
level since April and the percentage drop was the biggest since January.
Financial markets had expected starts to rise to 600,000 units. September's
housing starts were revised upwards to a 592,000 unit rate from the previously
reported 590,000 units.
"
The trickle-down effect of the housing number is going to be amazing," said
Dan Cook, senior market analyst at IG Markets, Chicago. "It's likely
that more construction crews will get cut after this, and the supplier
who supply those crews will be hurt as well. This is not good news at
all."
A separate report from the Labor Department showed the Consumer Price
Index rose 0.3 percent, a touch above market expectations for a 0.2 percent
increase, after rising an unrevised 0.2 percent in September.
U.S. stock index futures turned negative after the data, while U.S. Treasury
debt prices extended losses on the higher than expected inflation data.
The U.S. dollar rose against the euro, and New York gold futures held
gains near record highs.
Groundbreaking for single-family homes fell 6.8 percent last month to
an annual rate of 476,000 units, the lowest since May. Starts for the
volatile multifamily segment tumbled 34.6 percent to a 53,000 annual
pace, extending the previous month's slide.
Compared to October last year, housing starts dropped 30.7 percent. The
latest data will be a blow to the housing market, which had shown signs
of stabilization after a three-year slump. Residential investment contributed
to economic growth in the July-September period for the first time since
2005.
The U.S. economy expanded in the last quarter after four straight quarters
of decline. The recovery in the housing market has been led by the popular
$8,000 tax credit for first-time buyers, which has since been extended
and expanded by the government.
Source: Reuters
Tax Credit Expands Home Buyer, Economic Opportunites
Tuesday,
November 17, 2009
The National Association of Home Builders (NAHB)
is spreading the word to consumers about an important new law that extends
and expands an attractive tax incentive for potential home buyers. The
Worker, Homeownership, and Business Assistance Act of 2009, signed into
law by President Obama on Nov. 6, extends the deadline for the first-time
home buyer tax credit and gives a larger group of home buyers the chance
to take advantage of this government program.
"The tax credit has already proven to be an effective means of
boosting economic activity," said NAHB Chairman Joe Robson, a home
builder from Tulsa, Okla. "We hope that the government's action
to enhance it will have the intended additional stimulative effect that
will help get housing and the economy back on solid ground."
The new law extends the $8,000 first-time home buyer credit through
April 30, 2010, giving buyers who have signed a sales contract by that
deadline until June 30 to close their deal. A new credit of up to $6,500
was created for repeat home buyers who buy a principle residence if they
have been residing in the home they currently own (or previously owned)
for five consecutive years out of the eight years preceding the purchase
of the new home.
"It's not just a first-time buyer tax credit anymore," Robson
said. "Move-up buyers, move-down buyers, and others who have previously
owned a home can now qualify as well. In fact, close to 70 percent of
all potential home buyers should now qualify for some form of the credit."
Income limits for eligible buyers have also been increased to allow
more consumers to qualify, particularly those in markets with a higher
cost of living. Now single taxpayers with incomes up to $125,000 and
married couples earning up to $225,000 may be eligible. Partial credits
are available to home buyers who earn up to $20,000 more than the limits.
A leading source of consumer information on the tax credit is NAHB's
Web site at www.federalhousingtaxcredit.com, which saw a huge increase
in visits in the days after the new law was signed. It provides basic
information about the first-time and repeat buyer credits, detailed question
and answer sections, and links to additional home-buying resources for
consumers.
"The federalhousingtaxcredit.com Web site had more than 70,000
visits on the Monday after the President enacted the law," said
Robson. "Since the site was established in mid-2008, there have
been more than 6 million visits by people seeking information about the
home buyer tax credits. That tells you how hungry consumers are for easy-to-understand
information on this great opportunity that has been opened to them."
Source: NAHB
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to top Builder Confidence Unchanged in November
Tuesday, November 17, 2009
In a survey in which most responses were
received prior to congressional action to keep an important home buyer
incentive
alive, builder confidence in the market for newly built, single-family
homes remained unchanged at a low level this November, the National Association
of Home Builders (NAHB) reported today. The NAHB/Wells Fargo Housing
Market Index (HMI) held flat at 17 while its component gauging sales
expectations for the next six months rose two points from the previous
month, to 28.
"When the HMI survey was conducted at the beginning of this month,
home builders were facing the imminent expiration of the $8,000 first-time
home buyer tax credit at the end of November, with no guarantee that
this valuable buyer incentive would be extended," said NAHB Chairman
Joe Robson, a home builder from Tulsa, Okla. "Now that Congress
has done its job by both extending the tax credit into next year and
expanding eligibility for it among potential buyers, we are very hopeful
that this will have the intended stimulative effect on sales activity
going forward."
"Today's report confirms that home builders and buyers were in
something of a holding pattern in early November as the anticipated expiration
of the tax credit drew near and congressional action had not yet taken
place to address this," confirmed NAHB Chief Economist David Crowe. "Meanwhile,
the challenges that builders are facing in obtaining credit for new housing
production and appropriate appraisal values for their homes continued
to worsen. These issues still present a very worrisome problem that is
weighing down prospects for a sustained housing market recovery."
In a special questions
section of the HMI survey, fully one-third of respondents indicated
that they have recently lost sales due to low appraisal
values. This is up from a quarter of respondents who indicated as much
in a survey taken in July. Builders report that low appraisal values
are often tied to the use of foreclosed and distressed properties as "comps" in
the appraisal process.
Derived from a monthly
survey that NAHB has been conducting for nearly 20 years, the NAHB/Wells
Fargo Housing Market Index gauges builder perceptions
of current single-family home sales and sales expectations for the next
six months as "good," "fair" or "poor." The
survey also asks builders to rate traffic of prospective buyers as "high
to very high," "average" or "low to very low." Scores
for each component are then used to calculate a seasonally adjusted index
where any number over 50 indicates that more builders view sales conditions
as good than poor.
The November HMI was unchanged from October's downwardly revised level
of 17. The component gauging current sales conditions and the component
gauging traffic of prospective buyers also remained unchanged, at 17
and 13, respectively, while the component gauging sales expectations
for the next six months edged up two points, to 28.
On a regional basis, HMI results were somewhat mixed in November. The
South recorded no change, at 17, while the Midwest posted a three-point
decline to 14, the Northeast registered a six-point decline to 19 and
the West bounced back five points from a big dip in October to finish
at 19.
Source: NAHB
Home Builder Sentiment Steady in November
Tuesday, November 17, 2009
U.S. home builder sentiment held steady at a low
level in November, according to a survey taken before the government
extended a popular tax credit for first-time buyers.
The National Association of Home Builders/Wells Fargo Housing Market
Index was unchanged at 17 for November, below market expectations for
a reading of 19. October's index was previously reported at 18.
A reading above 50 indicates that more builders view sales conditions
as good than poor.
The survey, released on Tuesday, was conducted before the government
extended and expanded the popular $8,000 tax credit for first-time home
buyers, which has been widely credited with pulling the housing market
from a three-year slump.
"
Now that Congress has done its job by both extending the tax credit into
next year and expanding eligibility for it among potential buyers, we
are very hopeful that this will have the intended stimulative effect
on sales activity going forward," said NAHB Chairman Joe Robson.
Source: Reuters
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Stocks Jump as Retail Sales Rebound in October
Monday November 16, 2009
Investors grew more upbeat about the economy Monday
after retail sales rebounded more than expected in October and as a weaker
dollar sent commodity prices higher.
Major stock indexes rose more than 1 percent to new 13-month
highs, including the Dow Jones industrial average, which jumped
115 points.
The Standard & Poor's
500 index topped 1,110, the first convincing move above 1,100
after hovering around that level for the past month.
Stocks pared some of their gains after Federal Reserve Chairman Ben Bernanke
said policymakers would monitor the dollar while at the same time repeating
that the Fed will hold interest rates low until the economy strengthens.
Low interest rates and easing fears about the global economy have weakened
demand for the dollar.
In prepared remarks for a speech to the Economic Club of New
York, Bernanke said the Fed will "ensure that the dollar
is strong and a source of global financial stability."
The rare discussion about the dollar from the Fed gave a boost to the
currency, which pulled off its lows. That weighed on the gains of major
stocks indexes.
Weakness in the dollar earlier Monday lifted gold to a new record and
pumped up prices of other commodities, including oil. That, in turn,
helped shares of energy and materials companies.
In afternoon trading, the Dow rose 116.46, or 1.1 percent, to 10,386.93
after rising nearly 143 points ahead of Bernanke's speech.
The broader S&P 500 index rose 15.31, or 1.4 percent, to
1,108.79. It traded above 1,100 in mid-October but hasn't closed
above that
benchmark since October last year.
Source: Associated Press
There are Still Too Many Houses
Wednesday, November 11, 2009
The lights are on in the housing
market. But at more and more places, nobody's home.
House prices have risen in recent months after a long plunge, according
to the National Association of Realtors and the S&P Case-Shiller
national index. Fewer Americans owe more than their property is
worth, according to a report this week from Zillow.com.
But a full-fledged housing recovery will remain elusive until the market
can absorb all the houses and apartments that were built during the housing
boom. And on that front, progress has been slow.
About one in seven housing units was vacant in the third quarter, according
to the Census Department. This year has registered the highest reading
since the government began collecting such data in 1965.
Part of the glut comes from a rash of foreclosures as strapped borrowers
fall behind on their mortgages.
But rental apartments are emptying out at a record clip as well, as a
spike in the jobless rate and a decade of subpar wage growth have sent
many Americans back home to live with Mom and Dad.
And some owners, such as Treasury Secretary Tim Geithner, have decided
to rent their houses out after they couldn't sell them.
"
There's just too many houses out there for the population we have," said
Brian Peterson, an economist at Indiana University who focuses on housing. "The
market's going to take a couple years to clear."
The homeowner vacancy rate dropped to 2.6% in the third quarter from
2.8% a year ago, when homeowner vacancies hit their all-time high. But
a jump in the rental vacancy rate, to 11.1% from 9.9% a year earlier,
more than offset that decline.
Because twice as many people own their homes as rent, the total vacancy
rate -- 14.5% in the third quarter -- exceeds the sum of the homeowner
and rental vacancy rates.
The rise in vacancies comes after a decade in which homebuilders, motivated
by easy financing and rising prices, built many more homes than the U.S.
needed.
Source: Fortune
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Housing plan reaches 1 in 5 borrowers
Tuesday November 10, 2009
After a
slow start, the Obama administration's mortgage relief program has
reached one in five eligible homeowners, a government
report says.
More than 650,000 borrowers, or 20 percent of those eligible, have signed
up for trials lasting up to five months, the Treasury Department said
Tuesday. The modifications reduce monthly payments to more affordable
levels.
Launched with great fanfare in March, the plan got off to a weak start,
but now nearly 920,000 loan modification offers have been sent to more
than 3.2 million eligible homeowners. That works out to 29 percent, up
from 15 percent at the end of July.
In California, about 130,000 homeowners have been enrolled in the "Making
Home Affordable" loan modification plan, which President Barack
Obama unveiled in February. That works out to about 19 percent of the
state's homeowners who were either two payments behind or in foreclosure
at the end of last month, according to Treasury Department data.
"
We are reaching all the places that really got decimated," said
Michael Barr, an assistant Treasury secretary. "The other basic
story is we're reaching borrowers at a scale that has not been done by
any other modification program."
Two other hard-hit states, Arizona and Nevada had similar rates of assistance
as California, at 22 percent and 18 percent respectively. Florida, however,
was much lower, at 12 percent, possibly because of high numbers of investor-owned
properties that don't qualify for the program.
Source: Associated Press
Median Home
Prices Fell Nationwide in 3Q
Tuesday November 10, 2009
A real estate group says home prices fell in eight out of every 10 U.S.
cities in the third quarter of this year as heavily discounted distressed
sales made up 30 percent of all deals.
But home sales continued their climb, with quarterly sales outpacing
the second quarter and the previous year's figures, the National Association
of Realtors said Tuesday.
The median sales prices of existing homes declined in 123 out of 153
metropolitan areas compared with the same period a year ago. Prices rose
in the other 30 cities.
The national median price clocked in at $177,900, or 11 percent below
the third quarter last year.
"
The decline in the national median price has moderated recently, and
a shrinking supply of unsold inventory suggests we are getting closer
to price stabilization in many areas, " said Lawrence Yun, the group's
chief economist, in a statement. "But we need a steady stream of
financially qualified buyers to further reduce inventory and get us to
a self-sustaining market."
Source:
Yahoo Finance
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Fed
Officials Warn Weak Recovery Won't Spur Jobs
Tuesday November 10, 2009
Unemployment likely will remain high for the next
several years because the economic recovery won't be strong enough to
spur robust hiring, Federal Reserve officials warned Tuesday.
AP - In this photo made Wednesday, Nov. 4, 2009, Sonja Jackson, of Detroit,
holds a Employment Guide while attending ...
The cautionary note struck by the presidents of regional Fed banks in
San Francisco and Atlanta were the first public remarks of Fed officials
since the government reported last week that the nation's jobless rate
bolted to 10.2 percent in October. It marked only the second time in
the post-World War II period that the rate surpassed 10 percent.
In separate speeches, Janet Yellen, president of the Federal Reserve
Bank of San Francisco, and Dennis Lockhart, president of the Federal
Reserve Bank of Atlanta, warned that rising unemployment could crimp
consumers, restraining the recovery. Consumer spending accounts for about
70 percent of economic activity.
"
With such a slow rebound, unemployment could well stay high for several
years to come," Yellen said. "In other words, our recovery
is likely to feel like something well short of good times."
Yellen envisions the shape of the recovery kind of like an "L" with
a gradual upward tilt of the base.
Lockhart said "very slow net job gains" may occur "sometime
next year."
Troubles in the commercial real estate market and the plight of small
businesses also will weigh on the recovery, they said.
Small businesses -- which held up reasonably well in the 2001 recession
-- have been clobbered by the downturn, accounting for about 45 percent
of net job losses through the end of 2008, Lockhart said. During the
last two economic recoveries, small businesses contributed about one-third
of net job growth. Lockhart said he doubted that would be the case this
time.
That's because many small businesses rely on smaller banks for credit.
But troubled commercial real estate loans are concentrated at those banks,
hobbling the flow of credit. Lockhart said he is "particularly concerned" about
that linkage.
Source:
Associated Press
Trex(R) Debuts New Board Profiles and Reduced Bundle Packs
Monday,
November 9, 2009
Enhanced One-inch Trex Contours® and Trex Accents® Offer Product
Consistency
Trex® recently announced
the debut of one-inch board profiles on two of its best-selling collections – Trex
Accents® and Trex Contours®. These enhancements were the direct
result of feedback from Trex's industry partners and set the stage
for larger changes to the overall Trex product portfolio – including
a ground-breaking new decking and railing line – which will be
unveiled at the company's Distributor Meeting this week.
“
The transition to new board profiles on Accents and Contours will simplify
our decking offerings and provide greater design flexibility to mix and
match all of our product lines,” said Adam Zambanini, senior product
manager of decking at Trex, the nation's largest manufacturer of wood-alternative
decking, railing and fencing products.
In addition to the new board profiles, Trex also will be the first
decking manufacturer to offer reduced-size product bundles – transitioning
from a bundle size of 96 pieces per unit to 48 pieces per unit. This
change will create increased product turns for Trex’s industry
partners. Distributors will benefit from efficiencies in material handling
and reduced in-transit material handling damage – while dealers
will be able to stock more Trex product without increasing their inventory
position.
Said Zambanini, “We believe the reduced packs will provide greater
bundling opportunities for our distributors and dealers – allowing
them to move more product in less time while increasing productivity
and profitability.”
With these enhancements, all Trex decking will now measure 1” x
5.5” and be compatible with the Trex HideawayTM hidden fastening
system. Additionally, Trex Contours will have a square-edged profile
and a grooved edge profile, as opposed to its former scalloped underside.
The updated boards currently are available at both Trex manufacturing
facilities in Winchester, Va., and Fernley, Nev.
Trex Accents offers a subtle, refined wood grain pattern while Trex
Contours features a bold, dramatic grain. Naturally soft and comfortable
to the
touch, both collections are eco-friendly and low-maintenance, and provide
superior durability and wear resistance.
“
We are confident that these enhancements to the Accents and Contours
products will provide more flexibility and design options to consumers,
as well as more convenience and efficiency to distributors and dealers,” said
Zambanini.
Source:
BUSINESS WIRE
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U.S. Jobless Rate Hits 10.2 Percent
Friday, November 6, 2009
The U.S. jobless rate unexpectedly jumped to a 26-1/2-year high of 10.2 percent
last month, adding to pressure on the Obama administration to do more to tackle
unemployment even as signs of recovery mount.
The Labor Department said on Friday that employers cut 190,000 jobs in October,
more than the 175,000 markets had expected but fewer than the 219,000 lost in
September.
Taking some of the sting out of the report, job losses for August and September
were revised to show 91,000 fewer jobs were lost than previously reported.
While that hinted at some improvement in labor market conditions, economists
had looked for the jobless rate to rise to 9.9 percent from September's 9.8 percent.
" Unfortunately, the problem is becoming deeper and more protracted," Mohamed
El-Erian, chief executive of bond giant Pacific Investment Management told Reuters. "It's
not just the increase in the headline number. ... It's also about the longer-term
nature of unemployment, the increase in underemployment, and the prospect for
only a very gradual recovery."
Stocks erased early losses on the heels of the report, somewhat heartened by
a lessening in the pace of monthly job losses. The report lifted prices for U.S.
government bonds and the flight to safer assets initially boosted the U.S. dollar,
but it later fell back.
President Barack Obama has called job creation priority No. 1, but his scope
to take further steps to lift the economy is limited by record budget deficits.
Mounting unemployment could pose problems for the Democrats who control Congress
as they head into congressional elections in November 2010. This week, Republicans
wrested control of two state governorships away from Democrats in races where
the weak economy figured prominently.
" President Obama promised jobs during his campaign for president, and the
elections in Virginia and New Jersey on Tuesday were a clear referendum on his
failure to deliver on this promise," said Republican National Committee
Chairman Michael Steele.
Source: Reuters
Builders Applaud Congress on Extending Home Buyer Tax Credit
Thursday, November 5, 2009
The National Association of Home Builders (NAHB)
today applauded Congress for passing legislation that will extend and
expand the $8,000 first-time home buyer tax credit, stating that this
will provide a much-needed boost to the fragile housing market and economy.
"We commend lawmakers for acting in a bipartisan manner to extend
the first-time home buyer tax credit beyond its Nov. 30 deadline and
expand it to a wider group of home buyers," said NAHB Chairman Joe
Robson, a home builder from Tulsa, Okla. "The tax credit has proven
to be a powerful economic incentive. Today's action by Congress will
further stabilize housing and the economy by creating new jobs, stimulating
home sales, reducing foreclosures, cutting excess inventories and stabilizing
home prices."
The new law will extend the $8,000 credit for first-time home buyers
for sales contracts entered into by April 30, 2010 and closed by June
30. Further, it has been expanded to include a new $6,500 credit for
owners of existing homes who are purchasing a new principal residence.
An existing home owner can claim the $6,500 tax credit if they have been
residing in their principal residence for five consecutive years out
of the last eight. Additionally, the income eligibility limits to claim
the full credit amount for both groups of home buyers have been raised
to $125,000 for individuals and $225,000 for married couples.
NAHB estimates that the extended and expanded home buyer tax credit
will create 211,000 jobs and generate 180,000 additional home sales in
the coming year. It is also expected to generate $9.6 billion in wage
income and $6.9 billion in federal, state and local taxes.
The legislation, which also extends unemployment insurance benefits
and offers relief to cash-strapped firms by providing broader tax benefits
for businesses with net operating losses (NOLs), is expected to be signed
into law shortly by President Obama.
"The new NOL rules will throw a lifeline to struggling businesses,
allowing them to continue making payrolls, paying business loans and
otherwise keep their doors open until the economic recovery takes hold," said
Robson.
Source: NAHB
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Mortgage Rates Drop Below 5 Percent: Freddie Mac
Thursday, Nov 5, 2009
U.S. mortgage rates fell below 5 percent for the
first time in three weeks, a key level that may boost home loan demand
and help the hard-hit housing market recover, a closely watched mortgage
survey showed Thursday.
Interest rates on U.S. 30-year fixed-rate mortgages averaged 4.98 percent
for the week ending November 5, down from the previous week's 5.03 percent,
according to a survey released on Thursday by home funding company Freddie
Mac.
Many industry experts view 5 percent as a key psychological level. When
rates drop below this threshold, home loan demand tends to rise, while
the opposite holds true when rates rise. A year ago, 30-year mortgage
rates averaged 6.20 percent.
Source: Reuters
Fed Likely to Keep Key Interest Rate at Record Low
Wednesday, November 4, 2009
Faced with lurking dangers to the budding recovery,
Federal Reserve policymakers are sure to leave a key interest rate at
a record low to entice Americans to spend more and help the economic
turnaround gain traction.
The economy started to grow again last quarter for the first time in
more than a year, although there are uncertainties about the strength
and staying power of the recovery, especially after government supports
are removed.
Fed Chairman Ben Bernanke and his colleagues resumed meeting Wednesday
morning and are likely to note the country's economic and financial improvements
when they wrap up their two-day session in the afternoon. But they'll
also warn that rising joblessness and hard-to-get-credit for many people
and companies will restrain the rebound in the months ahead. Troubles
in the commercial real estate market, where soured loans are contributing
to bank failures, also remain a concern.
At its last meeting in late September, the Fed opted to stretch out into
early next year a key program aimed at forcing down mortgage rates and
providing support to the housing market. The central bank isn't expected
to veer from that course Wednesday.
Wanting to nurture the recovery, the Fed is widely expected to keep the
target range for its bank lending rate at zero to 0.25 percent. If it
does, commercial banks' prime lending rate, used to peg rates on home
equity loans, certain credit cards and other consumer loans, will stay
at about 3.25 percent, the lowest in decades.
"
I don't think there is confidence at this point that the economy is firing
on all cylinders by itself," said Bill Cheney, chief economist at
John Hancock Financial Services. "It is not ready to be weaned off
the extra fiscal and monetary support."
Against that backdrop, many economists predict the Fed will maintain
a pledge to keep rates "exceptionally low" for an "extended
period." The hope is that super-low rates will spur consumers and
businesses to spend more, supporting the recovery.
Source: Associated Press
Stocks
Surge on Manufacturing, Housing Data
Monday November 2, 2009
Stocks
are snapping back from Friday's big losses as stronger-than-expected
reports on manufacturing and housing
allay concerns
that the economy's recovery won't last. Major indexes rose more than
1 percent in early trading Monday, including the Dow Jones industrials,
which jumped about 130 points, erasing a chunk of Friday's 250-point
loss.
The gains came after the Institute for Supply Management said the
manufacturing industry grew at the fastest pace in October since
April 2006. The ISM
manufacturing index clocked in at 55.7, much better than the 53 economists
had expected. It was the third month in a row the index came in above
50, which indicates growth.
Meanwhile, the National Association of Realtors said pending home
sales increased for the eighth straight month in September. The index
rose
6.1 percent from August to 110.1. It was the highest reading since
December 2006 and more than 21 percent above a year ago. Economists
had expected
the index would be level at 103.8.
Also Monday, the Commerce Department said construction spending increased
0.8 percent in September, matching the gain in August. Economists
had been expecting a 0.3 percent decline.
"
This should help relieve some of the fears that the recovery is not sustainable," said
Peter Cardillo, chief market economist Avalon Partners Inc. of the
reports.
Source:
Associated Press
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September
Pending Home Sales Rise 6.1 Percent
Monday November 2, 2009
The volume of signed contracts to buy previously occupied
homes rose for the eighth straight month in September as buyers scrambled
to take advantage of a tax credit for first-time owners that expires
at the end of this month.
The National Association of Realtors said Monday its seasonally adjusted
index of sales agreements rose 6.1 percent from August to 110.1. It was
the highest reading since December 2006 and more than 21 percent above
a year ago. Economists surveyed by Thomson Reuters expected the index
would be level at 103.8.
Typically there is a one- to two-month lag between a contract and a done
deal, so the index is a barometer of future sales.
The housing market has been rebounding from the worst downturn in decades,
aided by an aggressive federal intervention to lower mortgage rates and
bring more buyers into the market.
Completed home resales rose in September to the highest level in more
than two years as buyers scrambled to complete their purchases before
the tax credit of up to $8,000 for first-time owners expires on Nov.
30.
Congress is moving to extend the credit to buyers who sign sales agreements
by April 30. Lawmakers also want to add a $6,500 credit for buyers moving
into other homes as long as they have been living in their current residence
at least five years.
With foreclosures continuing to surge, "an extended and expanded
tax credit would help absorb this incoming inventory," Lawrence
Yun, the Realtors' chief economist, said in a statement.
Pending sales were up 10 percent in the West and 8 percent in the Midwest.
They were up 5 percent in the South and were down 2 percent in the Northeast. Source:
Associated Press
$8,000 Home Credit Still in Play
Thursday, October 29, 2009
Confused about whether lawmakers will extend
the $8,000 first-time homebuyer credit and what it would look like?
That's understandable, since the situation is still very fluid.
Here's where things stand.
Support for the credit: There is still bipartisan support in Congress
for extending the credit past Nov. 30 and making it available to more
homebuyers.
The Obama administration wants the credit extended for a "limited
period," Treasury Secretary Tim Geithner and Housing Secretary Shaun
Donovan said Thursday. They did not elaborate.
What's on the table now: There appears to be a compromise deal that falls
between the most and least generous proposals that have been put forth
so far.
"
There is bipartisan compromise to extend the credit through spring and
expand it to existing homeowners who are stepping up to a different home," financial
policy analyst Jaret Seiberg wrote in a research note for Concept Capital's
Research Group.
The latest idea under discussion is a credit worth up to $8,000 for first-time
homebuyers and up to $6,500 for homeowners looking to trade up to a bigger
primary residence and who have already lived in their current home for
five years. (CNN: Senate compromise may be in the works.)
To qualify for the full credit, however, homebuyers must have adjusted
gross income of less than $125,000 ($225,000 for married couples filing
jointly).
In addition, the credit would only apply to homes sold for $800,000 or
less. Contracts to buy a home must be signed by April 30, 2010, and the
deals must close by June 30 in order for a buyer to qualify for the credit.
Rationale for extending the credit: Supporters of the credit say it has
helped to boost existing home sales in recent months. Extending the credit
would help further support sales, stabilize housing prices and generate
jobs in the face of an expected rise in foreclosures next year, which
is expected to put downward pressure on prices.
If the credit is allowed to expire, they say, the housing market and
the broader economy will grow moribund again.
"
The most fundamental argument for the credit is that nothing works in
the economy if housing is falling -- it hurts household wealth and credit
becomes tight," said Mark Zandi, chief economist at Moody's Economy.com. "[The
credit] is a good insurance policy. It's vital to stem the housing price
declines."
Source: CNNMoney.com
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Economy
Grows in 3Q, Signals End of Recession
Thursday October 29, 2009
The economy grew at a 3.5 percent pace in the third
quarter, the best showing in two years, fueled by government-supported
spending on cars and homes. It's the strongest signal yet that the economy
has entered a new, though fragile, phase of recovery and that the worst
recession since the 1930s has ended. Going forward, many analysts expect
the pace of the budding recovery to be plodding due to rising unemployment
and continuing difficulties by both consumers and businesses to secure
loans.
"
This welcome milestone is just another step, and we still have a long
road to travel until the economy is fully recovered," said Christina
Romer, President Barack Obama's chief economist. "It will take sustained,
robust ... growth to bring the unemployment rate down substantially.
Such a decline in unemployment is, of course, what we are all working
to achieve."
Source:
Associated Press Foreclosures:
Worst-Hit Cities
Thursday October 29, 2009
While foreclosure rates are easing in some
of the hardest-hit cities, the crisis is beginning to expand into new
metro areas.
On Wednesday, RealtyTrac released its list of cities with the biggest
foreclosure problems during the third quarter. As expected, towns in
California, Florida and Nevada dominated the top 10, with Las Vegas taking
the top spot with a rate of 1 in 20 homes. That's a 53% increase over
the third quarter 2008.
But there was a bright spot: Half of the cities in the top 10 showed
year-over-year declines in their foreclosure rates, and 60% showed improvement
compared with the second quarter.
For example, second place Merced, Calif., saw foreclosures fall by 11%
from last year and 13% from last quarter, to 1 out of every 27 homes.
And Stockton, Calif., slipped to No. 4 from No. 2 last quarter. The city,
which is 80 miles east of San Francisco, had ranked highest for all of
2008.
"
We're not sure if that will be a one-time thing or a true continued trend,
but it's one of the first positive signs we've seen," said Rick
Sharga, a senior vice president at RealtyTrac.
But if Las Vegas was the big loser, its neighbor, Reno,
Nev., was hot on its heels. The No. 9 city posted an 80% gain in foreclosures
-- 1 in 37 homes -- compared to the third quarter of last year. And it's
just one of several smaller metro areas that are creeping their way up
RealtyTrac's foreclosure list.
"
Foreclosure activity is spreading from primary cities into secondary
areas," said Sharga. "These aren't your LAs and Phoenixes --
it's moving into outlying regions."
Boise, Idaho, cracked the top 20 for the first time as foreclosures jumped
141% -- the largest increase from 2008. Similarly, Provo, Utah, rose
120%.
The pair of cities "are the first two cases where areas with very
high unemployment are breaking into the top spots," Sharga said. "That
will continue over the next few months."
"The fact is, we're still seeing record levels of foreclosure
activity," said Sharga, who doesn't expect rates will peak until
2010 because many option-ARMs will reset over the next several months.
Still, the housing market seems to be adjusting, because home prices
are stabilizing -- albeit at a lower level, Sharga said.
A record number of properties "are coming down the foreclosure pipeline" as
well, Sharga said, and they will be trickling into the housing market
over the next four years.
"
We expect a longer, less robust recovery for the housing market," Sharga
said. "We won't know what's what until everything gets worked out
of the system."
Source: CNNMoney.com
First-time
Jobless Claims Drop Less Than Expected
Thursday October 29, 2009
The number of Americans claiming jobless benefits
for the first time dropped less than expected last week, evidence that
the labor market remains weak even as the economy is recovering.
The Labor Department said Thursday its tally of newly laid-off workers
seeking unemployment insurance fell by 1,000 to a seasonally-adjusted
530,000. Analysts expected a steeper drop to 521,000, according to a
survey by Thomson Reuters.
The report came on the same day the Commerce Department said the economy
grew at a 3.5 percent pace in the July-September quarter, snapping a
record streak of four straight quarterly declines. But the economy isn't
growing quickly enough to spur much hiring.
Initial claims need to fall below about 450,000 to signal that employers
are actually adding jobs, several economists said. Still, many saw some
positive signs in the report.
The number of people continuing to claim unemployment insurance benefits
dropped 148,000 to 5.8 million, a steeper fall than expected and the
sixth straight decrease. Those figures lag initial claims by a week.
Source:
Associated Press
Stocks Slide as New Home Sales Fall
Wednesday, October 28, 2009
Major market indexes fell sharply Wednesday after the Commerce Department
said new home sales dropped for the first time in five months. Sales
slid 3.6 percent in September to 402,000. Analysts had expected an increase.
The Dow Jones industrial average lost 119 points, or 1.2 percent. The
Nasdaq composite index fell 2.7 percent, while the Russell 2000 index
of smaller companies tumbled 3.5 percent. Many of the stocks in both
indexes are considered more risky and so they suffered some of the biggest
losses.
The retreat came as Goldman Sachs Group Inc. reduced its expectation
for the nation's economic output for the July-September period. Goldman
Sachs predicts third-quarter gross domestic product rose at an annual
rate of 2.7 percent, weaker than its earlier forecast of 3 percent.
The government's report on third-quarter GDP is due Thursday. Economists
are looking for growth at an annual rate of 3.3 percent after a record
four straight quarters of contraction.
The day's slide signaled that investors were reassessing their hopes
for a recovery in the economy. Demand for safe-havens like Treasurys
rose as did stocks of companies whose business is expected to fare better
in a slump. Stocks of consumer staples companies like Procter & Gamble
Co., which makes Tide detergent and Gillette razors, edged higher.
Analysts said the market's slide in the past week isn't surprising given
the size of the advance in the last eight months and mixed economic readings.
"
I'm not panicked at the moment," said Manny Weintraub, president
of Integre Advisors in New York. "I don't think anyone expected
a super robust recovery."
Stocks struggled Tuesday after a disappointing report on consumer confidence
stirred worries about the strength of the coming holiday shopping period.
According to preliminary calculations, the Dow fell 119.48, or 1.2 percent,
to 9,762.69.
The broader Standard & Poor's 500 index fell for the fourth straight
day, sliding 20.78, or 2 percent, to 1,042.63. The Nasdaq fell 56.48,
or 2.7 percent, to 2,059.61.
The Russell 2000 index of smaller companies fell 20.63, or 3.5 percent,
to 566.36.
At the New York Stock Exchange 2,777 stocks rose, while 322 rose. Volume
came to 1.7 billion shares compared with 1.4 billion Tuesday.
Source: Associated Press
Surprise Drop in New Home Sales
Wednesday, October 28, 2009
Sales of newly built homes fell unexpectedly
in September after rising for five straight months, according to government
figures released Wednesday.
The Commerce Department said new home sales fell 3.6% to a seasonally-adjusted
annual rate of 402,000 last month, from a downwardly revised rate of
417,000 in August. It was the first time new home sales declined since
March.
Economists surveyed by Briefing.com had expected September new home sales
to rise to a rate of 440,000 units.
"
We're attributing most of the decline to the potential expiration of
the new home-buyer tax credit," said Adam York, an economist at
Wells Fargo.
In addition to relatively low prices and attractive mortgage rates, the
housing market has been supported in recent months by a temporary government
tax credit for first-time homebuyers.
The credit, which can be worth up to $8,000 for eligible buyers, is set
to expire at the end of November. Congress is expected to extend the
credit, but the terms are still being debated.
Wednesday's report showed the median sales price rose to $204,800 in
September from $195,200 the month before. The average sales price was
$282,600.
The estimated number of new homes for sale at the end of last month was
a seasonally adjusted 251,000, according to the Commerce Department.
Last month, it was 262,000 unsold homes.
At the current sales pace, it would take 7.5 months to sell through that
inventory, according to the report. That's up from the previous month,
when the there was about 7.3 months of inventory on the market.
Source: CNNMoney.com
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U.S. Consumer Confidence Up For First Time Since 2007
Wednesday, October 28, 2009
Global consumer confidence is rebounding, and in
the United States has risen for the first time since 2007, amid signs
the world economy is picking up although spending is still restrained,
a survey showed on Wednesday.
Confidence was highest in India, followed by Indonesia and Norway, and
was weakest in Japan, Latvia, Portugal and South Korea, although in Korea
it had improved markedly, according to a quarterly survey by The Nielsen
Company, conducted between September 28 and October 16.
"
Consumer confidence is rising faster in BRIC countries than other markets,
driven by increasing job prospects," Oliver Rust, managing director
of Nielsen Hong Kong, told Reuters.
In the United States and Europe, high unemployment continued to discourage
spending on big-ticket items although confidence had improved as the
worst appeared to be over for those economies, New York-based Nielsen
said.
In the United States -- the world's biggest consumer market -- consumer
sentiment rose from three months ago for the first time since early 2007.
The data contrasts with a Conference Board index of U.S. consumer confidence,
released on Tuesday, which showed a sharp deterioration in confidence
this month.
The U.S. reading in The Nielsen Global Consumer Confidence survey at
84 was up 4 points from a similar survey in July but just below the global
average reading of 86 and well below India's score of 120 and Indonesia
on 115.
"
While consumer confidence in the United States edged up 4 index points,
that hasn't translated into spending confidence for the vast majority
of American consumers," said James Russo, vice-president, global
consumer insights at The Nielsen Company. "Clearly, this recovery
will be manifested in measured and restrained spending as consumers work
to repair their balance sheets."
A reading above 100 is considered optimistic. The global average was
up four points from a similar survey in July.
Source: Reuters
Mortgage Applications Slide as Tax Credit Expiration Looms
Wednesday October 28, 2009
Mortgage applications fell last week for the third week in a row, even
as interest rates edged lower, an industry group said Wednesday.
The Mortgage Bankers Association (MBA) said its index of mortgage application
volume fell 12.3% in the week ended Oct. 23 from the prior week.
The drop in activity came as a popular tax credit for first-time homebuyers
faced an uncertain future. The credit, which can be worth up to $8,000
for eligible buyers, is set to expire at the end of next month.
The MBA said refinancing applications also fell, by 16.2% from the previous
week. The purchase index, a measure of applications at mortgage lenders,
declined 5.2% last week.
Meanwhile, interest rates on the widely-used 30-year fixed mortgage eased
to 5.04% from 5.07%, according to the MBA.
The MBA report also showed the average rate for 15-year fixed-rate mortgages
rose to 4.53% from 4.51%.
Rates for one-year adjustable rate mortgages, or ARMs, slid to 6.79%
from 6.86%.
Government figures are expected to show Wednesday that sales of newly
built homes rose at an annual rate of 440,000 units in September. That
would be an increase of 2.6% versus the previous month.
Source: CNNMoney.com
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Home Prices
Rise for 3rd Straight Month
Tuesday,
October 27, 2009
Home prices rose for the third straight month in August, data Tuesday
showed, a key sign for a broad and sustained housing recovery.
The Standard & Poor's/Case-Shiller home price index of 20 major cities
climbed 1 percent from July to a seasonally adjusted reading of 144.5.
While prices are down 11.4 percent from August a year ago, the annual
declines have slowed since February.
Prices are at levels not seen since August 2003 and have fallen almost
30 percent from the peak in May 2006.
The latest index shows a widespread turnaround with prices rising month-over-month
in 15 metro areas since June.
"
If the increases are consistent across the markets, this is key," said
Wharton School real estate professor Susan Wachter before the index was
released. "Then we're seeing the formation of a bottom."
However, Wachter along with other industry experts still worry that
rising unemployment and more foreclosures could stifle the rebound.
Another
unknown is whether a temporary federal tax credit for first-time buyers
will be extended to help boost sales.
First-time homebuyers can receive a credit of 10 percent of the sales
price, up to $8,000. The real estate industry is lobbying Congress
to extend the credit past the Nov. 30 deadline. Top Democrats in the
Senate
are pressing a plan that would prolong the credit but gradually phase
it out over the next year.
Not all metros posted gains in August, though. Prices in Las Vegas,
Seattle and Charlotte, N.C., all fell to their lowest levels in August.
Prices
in Las Vegas have plunged by 56 percent since peaking in April 2006,
the largest peak-to-trough decline of all 20 cities.
Source: The Associated Press
Worsening
Job Picture Fuels
Slide in Confidence
Tuesday October 27, 2009
Americans' confidence about the
U.S. economy fell unexpectedly in October as job prospects remained
bleak, a private research group said Tuesday, fueling speculation
that an already gloomy holiday shopping forecast could worsen.
The Consumer Confidence Index, released by The Conference Board,
sank unexpectedly to 47.7 in October -- its second-lowest reading
since May.
Forecasters predicted a higher reading of 53.1.
A reading above 90 means the economy is on solid footing. Above 100
signals strong growth.
The index has seesawed since reaching a historic low of 25.3 in February
and climbed to 53.4 in September.
Economists watch consumer confidence because spending on goods and
services by Americans accounts for about 70 percent of U.S. economic
activity
by federal measures. While the reading doesn't always predict short-term
spending, it's a helpful barometer of spending levels over time, especially
for expensive, big-ticket items.
Recent economic data, from housing to manufacturing, has offered mixed
signals but some evidence that an economic recovery might be slow.
But on Tuesday, the figures showed that shoppers have a grim outlook
for the future, The Conference Board said, expecting a worsening business
climate, fewer jobs and lower salaries.
That's particularly bad news
for retailers who depend on the holiday shopping season for a hefty
share of their annual revenue.
"
Consumers also remain quite pessimistic about their future earnings,
a sentiment that will likely constrain spending during the holidays," said
Lynn Franco, director of The Conference Board's Consumer Research Center.
Source: The Associated Press
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Big Rebound in Existing-Home Sales Shows First-Time Buyer
Momentum
Washington, October 23, 2009
Existing-home sales bounced back strongly in September with first-time
buyers driving much of the activity, marking five gains in the past six
months, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums
and co-ops – jumped 9.4 percent to a seasonally adjusted annual
rate1 of 5.57 million units in September from a level of 5.10 million
in August, and are 9.2 percent higher than the 5.10 million-unit pace
in September 2008. Sales activity is at the highest level in over two
years, since it hit 5.73 million in July 2007.
Lawrence Yun, NAR chief economist, said favorable conditions matched
with a tax credit are boosting home sales. “Much of the momentum
is from people responding to the first-time buyer tax credit, which is
freeing many sellers to make a trade and buy another home,” he
said. “We are hopeful the tax credit will be extended and possibly
expanded to more buyers, at least through the middle of next year, because
the rising sales momentum needs to continue for a few additional quarters
until we reach a point of a self-sustaining recovery.”
Even with the improvement, Yun said the market is underperforming. “Despite
spectacular gains in the stock market, principally from the financial
sector recovery, most of the 75 million home owning families have more
wealth tied to their homes. Home values could soon turn consistently
positive and help the broad base of middle-class families, but we are
not there yet,” he said. “We’re getting early indications
of price stabilization, but we need a steady supply of qualified buyers
to meaningfully bring inventories down and return us to a period of normal,
steady price growth and to fully remove consumer fears, which would then
revive the broader economy. Without a firm foundation for middle-class
wealth recovery, the post-recession economic growth likely will be one
of the weakest in U.S. history.”
Source: National
Association of Realtors
Leading Economic Indicators Rise Again in September
Thursday October 22, 2009
A private forecast of economic activity rose for the
sixth straight month in September, a sign the economy will keep growing
next year.
The Conference Board's index of leading economic indicators rose
1 percent last month after a 0.4 percent gain in August. Wall Street
economists
expected an increase of 0.8 percent last month, according to a survey
by Thomson Reuters.
Economists expect the economy grew about 3 percent in the third quarter
after falling for a record four straight quarters. But many wonder
if that pace can continue in the current quarter and next year as
unemployment rises and consumers remain hesitant to spend.
The Conference Board index's six-month growth rate through September
was the strongest since 1983, but joblessness was weighing on the
recovery.
Source: Associated Press
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Economists Forecast Strong Housing Growth
Wednesday, October
21, 2009
The U.S. housing market appears to have bottomed out and looks likely
to return closer to normal--but not boom--levels by 2012, a group of
housing economists predicted today.
Enthusiasm with several strings attached was the prevailing mood expressed
in presentations prepared for the National Association of Home Builders
(NAHB) 2009 Fall Construction Forecast Conference. Those experts who
did venture numbers suggested that housing starts, which were at a seasonally
adjusted annual rate of 590,000 in September, would top 800,000 around
mid-2010, crack 1 million in mid-2011 and go over 1.5 million during
2012. That's still significantly below the 2005-2006 boom years, however,
when starts topped 2 million, or even what some economists regard as
a sustainable housing demand of roughly 1.8 million starts. But for a
beleaguered industry, any sign of growth is good news.
Indeed, after having to predict slumps at past NAHB conferences, the
economists' presentations were nearly giddy in comparison. "Housing
Market Recovery: Are We There Yet?" Robert Denk, NAHB's assistant
vice president for forecasting and analysis, titled his presentation.
The next slide gave his answer: "YES!"
Mark Zandi, chief economist at Moody's Economy.com, entitled his speech "The
Housing Crash Is Nearly History." And Carl Reichardt, managing director
and senior research analyst at Wells Fargo Securities, said he thinks
St. Patrick's Day was the date the market bottomed out this year.
NAHB Chief Economist David Crowe forecast that several key improvements
in the economy--including employment growth, a reduced unemployment rate,
and inflation-adjusted increases in the gross domestic product--all would
start showing up sometime next year. He looks for a sharp, V-shaped recovery
in both starts and in sales of new and existing homes to become apparent
by next summer.
Joel Prakken, chairman of Macroeconomic Advisers, also saw better days
ahead; he predicts private housing starts will rise from an annual rate
of 614,000 this quarter to 1.1 million in the July-September period of
2010. But like the others, he cited several downside risks. They include
lingering problems with the mortgage security markets, stingy bank lending
to consumers, the possibility that home prices will erode again, and
such unknowns as energy prices and the knock-on effects on the economy
from health care reform. As one of Denk's slides suggested, we're on "The
Long Road Back to Normal."
Source: ProSales Magazine Online
Fewer Home-Building
Permits Signal Weakness Ahead
Tuesday,
October 20, 2009
Applications
for home building permits, a gauge of future construction, fell in
September by the largest amount in five
months -- a discouraging sign for the housing industry.
The Commerce
Department said Tuesday that construction of new homes and apartments
rose 0.5 percent last month to a seasonally
adjusted annual rate of 590,000 units. That was a weaker showing than
the 610,000 economists had expected.
The applications for building permits fell 1.2 percent in September.
That's the biggest decline since a 2.5 percent drop in April and underscored
worries that the fledgling housing revival could be derailed by rising
unemployment, tighter bank lending standards and the expiration on Nov.
30 of the government's $8,000 tax credit for first-time homebuyers.
Housing has been struggling to recover this year following a steep
collapse that helped pull the overall economy into the worst
recession since the
1930s.
Real estate agents and homebuilders are lobbying Congress to extend
the tax credit, an effort appears to be gaining momentum, but the
administration
is being vague about its position.
Sen. Johnny Isakson, R-Ga., who spent his career as a real estate
agent before being elected to Congress, said "this market is going to
die a sudden death" without an extension.
Isakson and Sen. Christopher Dodd, D-Conn., chairman of the Senate's
banking committee, want to extend the credit until June 30 and to
drop the requirement that the credit be available only to first-time
buyers.
That's estimated to cost $16.7 billion.
The lawmakers have suggested that their measure be attached to an
extension of federal assistance to the millions in danger of exhausting
unemployment
insurance benefits.
Housing Secretary Shaun Donovan said at a congressional hearing Tuesday
that supporting the housing market "can be very expensive, especially
at a time of significant budget deficits."
The administration will make a recommendation on whether to extend
the credit in the coming weeks, after studying data on tax filings
from the
Internal Revenue Service. While there would be some negative effects
if it were allowed to expire, Donovan said, "I do not believe
that a catastrophic decline would be the result."
Source:
Associated Press
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Builders
Urge Congress to Renew Home Buyer Tax Credit to Create Jobs, Boost
Economy
Tuesday,
October 20, 2009
In order
to create hundreds of thousands of badly needed jobs and move the economy
to higher ground, the National Association
of Home Builders (NAHB) today called on Congress to extend and expand
the $8,000 first-time home buyer tax credit set to expire at the end
of next month.
Testifying before the Senate Banking Committee, NAHB Chief Economist
David Crowe warned that builders are reporting that business generated
by entry-level buyers is already declining because it is now too late
to complete a new home sale in time to take advantage of the tax credit.
"Not only will builders soon be losing one of their most effective
selling tools when the $8,000 federal housing tax credit expires on Nov.
30, they are also facing significant challenges that threaten to derail
the fragile housing recovery before it even has time to take root," said
Crowe. "Strict mortgage underwriting and low appraisals are making
it difficult for a willing buyer to complete the sale, and terms and
credit availability for builder acquisition, development and construction
(AD&C) loans are extremely tight. The bottom line is that housing
and the economy are at a critical crossroads."
To spur job growth, help reduce foreclosures and excess housing inventories
and stabilize home values, NAHB is calling on Congress to extend the
home buyer tax credit for an additional year through Nov. 30, 2010 and
make it available to all purchasers of a principal residence.
"We
estimate this would increase home purchases by 383,000 and create nearly
350,000 jobs in the coming year," said Crowe, adding
that it would also generate $16.1 billion in wages and salaries; $12.1
billion in business income and tax income of $11.6 billion for federal,
state and local governments.
Source: NAHB
Homes:
About to Get Much Cheaper
Tuesday, October 20, 2009
If you thought home prices were bottoming
out, you may be wrong. They're expected to head a lot lower.
Home values are predicted to drop in 342 out of 381 markets during the
next year, according to a new forecast of real estate prices.
Overall, the national median home price is predicted to drop 11.3% by
June 30, 2010, according to Fiserv, a financial information and analysis
firm. For the following year, the firm anticipates some stabilization
with prices rising 3.6%.
In the past, Fiserv anticipated the rapid decline in home-sale prices
over the past few years -- though it underestimated the scope.
Mark Zandi, chief economist with Moody's Economy.com, agreed with Fiserv's
current assessments. "I think more price declines are coming because
the foreclosure crisis is not over," he said.
In fact, those areas with high concentrations of foreclosure sales will
experience the steepest drops, according to Fiserv. Miami, for example,
is expected to be the biggest loser. Prices are forecast to plunge 29.9%
by next June -- after having already fallen a whopping 48% during the
past three years.
If Fiserv's forecast holds, Miami real median home price will tumble
to $142,000 by June 2011.
In Orlando, Fla., the second-worst performing market, Fiserv anticipates
a 27% price collapse by June 2010, followed by a less severe drop the
following year. In Hanford, Calif., prices are estimated to drop 26.9%
and continue falling 9.5% in 2011; in Naples, Fla., they're expected
to fall 26.8% and then flatten out.
Other notable losers include Las Vegas, where prices have already fallen
54.6% and are expected to lose another 23.9% by June 2010. In Phoenix
values have already collapsed by 54% and could fall another 23.4%. In
both cities, Fiserv anticipates the losses to continue into 2011, but
they will be less than 5%.
Source: CNNMoney.com
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Builder
Confidence Slips in October
Monday,
October 19,2009
With the expiration date for an important home
buyer incentive approaching, builder confidence in the market for
newly built, single-family homes slipped one point to 18 in
October, according
to the latest National Association of Home Builders/Wells Fargo
Housing Market Index (HMI).
"It comes as no surprise that after trending upward from an historic
low in January, the HMI's positive momentum now appears to have stalled," said
Joe Robson, chairman of the National Association of Home Builders (NAHB)
and a home builder from Tulsa, Okla. "Our economists have repeatedly
warned that the approaching expiration of the $8,000 home buyer tax credit
on Nov. 30, combined with the massive hurdles that builders face in obtaining
construction financing and appropriate appraisals on new homes, could
derail the fragile recovery in housing just as it is starting to take
shape.
"Congressional
action to expand the tax credit and extend it for one year would provide
a critically needed boost to the employment market
and economy, generating nearly 350,000 jobs, $28.2 billion in wages,
salaries and business income and $11.6 billion in additional tax revenues.
That's an opportunity we can't afford to pass up at this difficult time."
"This
is the first time since November of 2008 that all three component indexes
of the HMI have declined," noted NAHB Chief Economist David
Crowe. "Clearly, builders are experiencing the effects of the expiring
tax credit on their sales activity, since it would be virtually impossible
at this point to complete a new home sale in time to take advantage of
that buyer incentive before Nov. 30."
Source: NAHB
Retail Sales
Hint at Improving Consumer Demand
Wednesday,
October 14, 2009 Sales at
U.S. retailers fell in September, but rose excluding motor vehicles
for a second straight month
in September,
raising cautious optimism consumer spending could support the economic
recovery.
The Commerce Department said on Wednesday total retail sales fell
1.5 percent in September, the biggest decline since December, after
surging
by a revised 2.2 percent in August. Sales in August were previously
reported to have increased by 2.7 percent.
Analysts polled by Reuters had forecast headline retail sales falling
2.1 percent in September.
"
There's solidity, or new strength, in all discretionary spending categories
and many of those were strong last month, said Pierre Ellis, senior economist
at Decision Economics in New York. "We evidently have hit the bedrock
level of consumer spending and can even see a little bit of normalcy
going forward." Source:
Reuters
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For
Many U.S. Wealthy, Housing Crisis Still a Squeeze
Wednesday, October 14, 2009
Despite some signs that the worst
of the U.S. residential housing crisis may be over, many wealthy
homeowners
are still being squeezed by the combination of weak home prices and
the stock market crash.
"
I think for wealthy homeowners it will get worse before it gets better," said
Dennis Hedlund, founder of iEmergent, a forecaster for mortgage and
real estate companies.
"
I don't think home prices have bottomed yet. Many people are stuck at
the high end, as there aren't many buyers out there," Hedlund
said of owners of luxury properties.
From California to Massachusetts, the U.S. housing crisis came after
years of easy credit and soaring property values. Towns like the western
Chicago suburb of St. Charles saw an unprecedented growth of wealth,
especially in high-end homes.
An hour by train from Chicago and known for good schools, St. Charles
was a magnet for senior managers and professionals. But as the housing
crisis that began in the subprime residential market spread up the
property chain, the once-thriving high-end local market ground to a
near halt.
"
We've never seen anything like it," said Maurine Trafals, office
manager at local realty agency Source One. "The market just stopped
in the summer."
St. Charles, population 40,000, now has 74 homes for sale with buyers
asking more than $1 million.
"
That's a huge number to have on the market in a community of this size," Trafals
said.
In 2009 five homes over $1 million have sold, compared with 21 in 2008.
Prices are down 20 percent from the peak in 2007.
"
There are fewer and fewer potential buyers out there, as mid-range homeowners
are getting squeezed," said Ray Schafer, co-owner of home builder
Michael Raymond Custom Homes, whose firm has had a luxury home on offer
here for more than a year.
Schafer has cut his asking price by $50,000 to just under $1.2 million,
without drawing out any offers.
"
We can't hold onto inventory forever," Schafer said. "So we're
just lowering the price until it's such an extreme bargain someone
picks it up."
The national luxury market is weak on both the buyer and seller sides,
coast to coast. Wealthy homeowners have seen cash reserves erode from
the stock market collapse, which also hit retirement savings. The big
drops in home prices have squeezed home equity loans. And many high-earners
have also lost jobs.
"
High-end owners have been hit from all sides," said Cora Berkery,
a realtor at Surterre Properties in Orange County, California, site
of Disneyland and hundreds of million-dollar homes.
Many wealthy homeowners have held asking prices high in the hope of
outlasting the 2-year old property slump. But more are expected to
slash prices
in the coming year to avoid further losses or obtain cash, adding more
properties to the market.
Source:
Reuters
Roubini
says Housing Market Hasn't Bottomed
Thursday, October 8, 2009
U.S. housing prices may still fall more than
10 percent, killing an incipient recovery, as demand from first-time
home
buyers fades, leading economist Nouriel Roubini said on Thursday.
Roubini, one of the few economists who accurately predicted the magnitude
of the financial crisis, said massive losses in commercial real estate
loans will add to the problem, forcing banks to raise more capital.
"
The stress is moving from residential mortgages that are still in deep
trouble, to commercial real estate, where they are just starting to recognize
that they're going to have massive, massive losses," Roubini of
RGE Global Monitor told reporters after a presentation for a World
Economic Forum report on the global financial system.
U.S. home prices rose for the third straight month in July, raising
hopes the market is stabilizing after a three-year plunge.
A first-time buyer credit of $8,000, which is set to end on November
30, has jump-started housing activity this year and has helped reduce
a massive inventory of unsold homes.
While the number of unsold houses may have bottomed out, prices are
poised to fall further, increasing pressure on the economy again, Roubini
said.
One of the main risks next year may be from losses on some $2 trillion
in outstanding commercial real estate loans, the economist predicted.
"
Half of this is in medium-sized and smaller banks, and even in the larger
ones. Most of these losses are not recognized because they're keeping
the loans at face value on their books," he said, forecasting
that U.S. and U.K. banks will need to raise more capital when those
writedowns
are made.
Still, Roubini sees a greater chance of a U-shaped economic recovery
in developed economies, with a 20 percent to 25 percent chance of a
double-dip.
" If it's a U-shaped recovery, China, Asia, and emerging markets will do
fine. If there is a double dip, the consequences will be severe for
everybody."
Source:
Reuters
Foreclosures Mark Pace of Enduring U.S. Housing
Crisis
Thursday, October 8, 2009
Every 13 seconds in America, there is another foreclosure
filing.
That's the rhythm of a crisis that threatens to choke off hopes for a
recovery in the U.S. housing market as it destroys hundreds of billions
of dollars in property values a year.
There are more than 6,600 home foreclosure filings per day, according
to the Center for Responsible Lending, a nonpartisan watchdog group based
in Durham, North Carolina. With nearly two million already this year,
the flood of foreclosures shows no sign of abating any time soon.
If anything, the country's worst housing downturn since record-keeping
began in the late 19th century may only get worse since foreclosures,
which started with subprime borrowers, have now moved on to the much
bigger prime loan market on the back of mounting unemployment.
In congressional testimony last month Michael Barr, the Treasury Department's
assistant secretary for financial institutions, said more than 6 million
families could face foreclosure over the next three years.
"
The recent crisis in the housing sector has devastated families and communities
across the country and is at the center of our financial crisis and economic
downturn," Barr said.
A September report by a foreclosure task force appointed by Florida's
Supreme Court pointed to a shift in the root cause of foreclosures: "People
are no longer defaulting simply because of a change in the payment
structure of their loan. They are defaulting because of lost jobs or
reduced hours
or pay."
Florida had the nation's highest rate of homes -- 23 percent -- that
were either in foreclosure or delinquent on mortgage payments in the
second quarter, and the report said "the latest news for Florida
is horrifying."
A recent pickup in sales and home prices in some regions has been heralded
as a sign that the crisis in residential real estate may be close to
bottoming out, after the steepest price decline since at least 1890.
But nearly half of recent sales have been attributed to foreclosures
or "short sales" at bargain-basement prices.
Even as the U.S. economy seems to be recovering from its worst recession
since the Great Depression, mortgage delinquencies continue to rise.
And that adds risk to any relatively upbeat assessment, since foreclosures
depress the value of nearby properties while eroding the net worth of
homeowners and the tax base for communities nationwide.
The Center for Responsible Lending says foreclosures are on track to
wipe out $502 billion in property values this year.
That spillover effect from foreclosures is one reason why Celia Chen
of Moody's Economy.com says nationwide home prices won't regain the peak
levels they reached in 2006 until 2020.
In states hardest-hit by the housing bust, like Florida and California,
the rebound will take until 2030, Chen predicted.
"
The default rates, the delinquency rates, are still rising," Chen
told Reuters. "Rising joblessness combined with a large degree of
negative equity are going to cause foreclosures to increase," she
added.
Anyone doubting that the recovery in U.S. real estate prices will be
long and hard should take a look at Japan, Chen said. Prices there are
still off about 50 percent from the peak they hit 15 years ago.
Jay Brinkmann, chief economist with the Mortgage Bankers Association,
said foreclosures are expected to peak in the second half of 2010.
But that forecast is based on a projection that unemployment will begin
falling
after topping out "barely in double digits by the middle of next
year."
Source: Reuters
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House
Votes to Extend Home Credit for Military
Thursday,
October 8, 2009
The U.S.
House of Representatives on Thursday voted overwhelmingly to
extend a first-time homebuyers' tax credit for overseas military
members through November 30, 2010.
The measure, which passed by a vote of 416 to 0, comes as Democrats
are weighing whether to extend the $8,000 tax credit for all first-time
homebuyers,
which was enacted to combat the worst downturn since the Great
Depression.
A broader expansion, however, would not necessarily win such widespread
support.
President Barack Obama and Democratic leaders in Congress also
are considering an extension of social safety-net programs, such
as unemployment
insurance,
and spending for new construction programs to spur the economy
and reverse a climb in the U.S. unemployment rate, which is now
at a 26-year
high.
But they face opposition from Republicans who say existing measures
have added massively to the U.S. budget deficit and done little
to jump-start
growth.
Source:
Reuters
Mortgage rates remain below 5 percent
Thursday, October 8, 2009
Average
rates for 30-year home loans stayed below 5 percent for the second-straight
week, kick-starting
refinancing activity, Freddie Mac said Thursday.
The average rate on a 30-year fixed mortgage was 4.87 percent, down
from 4.94 percent last week, Freddie Mac said. The last time rates
for 30-year
home loans were lower was the week ending May 21, when they averaged
4.82 percent.
This week's average rate for 30-year mortgages remained above the record
low of 4.78 percent established in the spring. Last year at this time,
the 30-year fixed-rate mortgage averaged 5.94 percent.
Low rates make home buying or refinancing more attractive for consumers.
Case in point: refinance applications climbed 18 percent from last
week, the Mortgage Bankers Association said Wednesday.
By refinancing at current rates, borrowers could trim nearly $134 off
their monthly mortgage payments on a $200,000, 30-year fixed-rate loan,
Freddie Mac said.
"
Such low rates are spurring mortgage demand," said Frank Nothaft,
Freddie Mac's chief economist.
Still, borrowers may want to consider the Federal Reserve's recent
announcement that it is slowing down a program intended to lower mortgage
rates and
boost the housing market. Analysts say mortgage rates should remain
low for now but could eventually move higher, and homeowners who want
to
refinance mortgages shouldn't drag their feet.
Source:Associated
Press
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More Upside for Homebuilders or Is It Too Late?
Thursday,
October 8, 2009
Homebuilders such as Lenar (LEN) and Toll Brothers (TOL)
have enjoyed a nice rally amid hopes the worst of the housing crisis
is over.
But Goldman Sachs recently raised eyebrows, when it upgraded the group
to "attractive" from "neutral," adding "stable
home prices, low mortgage rates, and strength in sales activity...should
lead to higher equity values," according to WSJ.
In contrast, Citi analyst Josh Levin says the party's over for now, and
can't see justifying owning the group at such high valuations, according
to WSJ.
Our guest Jon Najarian, president of OptionMonster.com, notes Goldman
may be looking ahead to more stimulus for the housing sector. President
Obama's $8,000 tax credit for first-time homebuyers is set to expire
November 30. "I think they will extend it," says Najarian.
(Senate Banking Chairman Chris Dodd wants a six-month extension.) Najarian
points to sharp declines in auto sales after the Cash for Clunkers program
ended -- a similar trend that wouldn't be politically palpable for Washington
right now.
Click on the video to view Najarian's picks and strategies for the home-building
sector.
Najarian does not own any of the homebuilder stocks mentioned in the
segment.
Source: Yahoo Finance
Homeowners
Reject Frills Like Media Rooms: Study
Tuesday, October 6, 2009
Home theaters are passe. Home offices
are in.
The long U.S. housing downturn has led homeowners to scale back both
the size of houses and the amenities found within them, but consumers
are still willing to invest in energy efficiency, according to a quarterly
survey by an architects' trade group.
The survey by the American Institute of Architects (AIA) found budget-conscious
Americans are less interested in having hobby or game rooms, media rooms,
home workshops, or suites for au pairs or in-laws. Exercise rooms and
additional laundry space are also less popular than a year ago, as are
three-car garages, the AIA said on Tuesday.
The shift in tastes reflects worries about home values, tighter family
budgets, and the threat of unemployment.
"
Affordability is a big concern," said AIA Chief Economist Kermit
Baker. "Homeowners are not looking to spend more on their
home for frills, particularly if they don't think they can
recapture that
when
they sell it."
Home offices are the most popular special-function room, the survey found.
Almost 46 percent of architects said home offices are gaining in popularity,
up about 5 percentage points from a year earlier.
The increase is due to the appeal of telecommuting and the growing number
of Americans who are self-employed or who run small businesses that have
had to give up office space.
Meanwhile, more consumers are asking architects to make sure their homes
are energy-efficient. Two-thirds of architects said clients increasingly
demand better insulation to lower heating and cooling costs. More are
also requesting double- and triple-glazed windows, water-saving devices
and solar panels.
The AIA's quarterly survey polled more than 500 architecture firms that
focus on residential buildings. It reflects both work on new homes and
improvements to existing spaces. A March AIA survey found a sharp decline
in demand for high-end kitchen and bath amenities, amid concerns over
cost and homes' eventual resale values.
Source: Reuters
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Builders
Ready to Work with White House, Congress to Extend Home Buyer Tax
Credit
Tuesday, October 6, 2009
The National Association of Home Builders (NAHB)
today commended the White House for recognizing the success of the
$8,000 first-time home buyer tax credit and that extending the program
past its Dec. 1 expiration date will help to bolster the economy. "The tax credit has clearly had a positive effect on housing demand
and in the job market," said NAHB Chairman Joe Robson, a home builder
from Tulsa, Okla. "We stand ready to work with President Obama and
the Congress to extend and enhance the tax credit to help reduce foreclosures
and excess housing inventories, to stabilize home values and to push
housing and the economy on a glide path to recovery."
NAHB estimates conservatively that approximately 200,000 additional
home sales are attributable to the tax credit and that it has resulted
in a net increase of 187,000 jobs. Extending the credit through Nov.
30, 2010 and making it available to all purchasers of a principal residence
would result in an additional 383,000 home sales and generate 347,000
new jobs in the coming year.
White House Press
Secretary Robert Gibbs said yesterday that "there
has been quite a bit of success" with the home buyer tax credit.
He added that President Obama is considering extending the tax credit
to strengthen the economy and create jobs.
"Housing
is the best opportunity to put this country back to work. Prompt congressional
action on the tax credit is a crucial first step
to shoring up the fragile housing recovery and leading the economy to
higher ground," said Robson.
Source:
NAHB
Dropping Rents Will Drag House Prices Down with Them
Tuesday, October 6, 2009
The vacancy rate for rental apartments in the U.S. is now 7.8% and climbing,
says the Wall Street Journal. This is the highest vacancy rate in 23
years.
Worse, the vacancy rate is expected to keep climbing through the winter,
ultimately hitting the highest rate on record.
This is good news for renters and bad news for landlords. It's also
bad news for anyone who owns and would like to sell a house.
Why are rising rental vacancies bad news for homeowners?
Because rising vacancies put pressure on rents, as landlords have to
cut prices to woo a smaller pool of tenants. As rents drop, meanwhile,
one of the key measures of house-price value--the price-to-rent ratio--also
changes, and not for the good.
All else being equal,
when rents drop, the "Housing P/E ratio" --
price to rent -- increases as rents decrease. This is the same thing
that would happen to the P/E ratio of a stock if the company's earnings
began to shrink.
The more the rent/earnings shrink, the more expensive the house or company
is as a multiple of the rent/earnings.
Will people suddenly refuse to pay as much for houses because the price-to-rent
ratio rises a bit? No. But they may decide to rent instead of buy, which
will remove some demand from the housing market. And, this, in turn,
will put pressure on house prices. Source: Yahoo Finance.com
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Bad News: Jobs Market Getting Worse
Friday, October 2, 2009
Employers cut more jobs from their payrolls
in September and the unemployment rate hit another 26-year high, as the
long-battered U.S. labor market took an unexpected turn for the worse,
according to a government report Friday.
The Labor Department said there was a net loss of 263,000 jobs in the
month, up from a revised loss of 201,000 jobs in August. Economists surveyed
by Briefing.com had forecast losses would fall to 175,000 jobs.
This is only the second time this year that job losses rose from the
previous month, as the labor market had shown slow but relatively steady
improvement since a loss of 741,000 jobs in January.
September marked the 21st consecutive month that the number of workers
on payrolls has shrunk, a period during which 7.2 million jobs have been
lost.
Even though many economists, including those at the Federal Reserve,
have said there are signs that the economy is growing once again, Friday's
jobs report shows that job losses could continue well into the recovery,
limiting the strength of any economic turnaround.
"
This report is dismal and disappointing," said Sung Won Sohn, economics
professor at Cal State University Channel Islands. "The
'green shoots' in the economy are withering. Technically,
the economy
may have bottomed,
but the job market is lagging behind and struggling."
Source: CNNMoney.com
August
Pending Home Sales Rise to 2 1/2 Year High
Thursday October 1, 2009
Aspiring U.S. homebuyers rushed to take advantage
of a tax credit for first-time owners that expires in November, driving
up the number of signed sales contracts for the seventh straight month
in August. Construction spending also rose unexpectedly in August on
the biggest jump in housing activity in nearly 16 years, another sign
the real estate market is recovering from its four-year slump, data Thursday
showed.
Sales and homebuilding are being fueled by a tax-credit of up to $8,000,
low mortgage rates and cheap foreclosures. In some of the most hard-hit
areas, like Phoenix and Las Vegas, there are bidding wars for deeply
discounted properties. And in all but a few cities, home prices are slowly
starting to rise, reversing their three-year descent.
To make sure first-time buyers can complete their purchases by the Nov.
30 deadline, real estate agents "have been pushing buyers to sign
a contract at least a couple months in advance" according to Abiel
Reinhart, an economist with JPMorgan Chase.
More than a dozen bills have been introduced in Congress to extend the
credit, but it's unclear if lawmakers want to continue to subsidize the
market.
The National Association of Realtors said Thursday its index of sales
agreements rose 6.4 percent from July to 103.8, beating forecasts. It
was the highest since March 2007 and 12 percent above a year ago. Economists
surveyed by Thomson Reuters expected the index would rise to 98.6.
Source: Associated Press
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U.S.
Personal Spending Surges, Jobless Claims Rise
Thusday, October 1, 2009
U.S. consumer spending in August rose at the fastest in
nearly 8 years, but a weak labor market and the manufacturing sector's below
forecast growth in September could hamper a nascent economic recovery.
The Commerce Department said on Thursday personal spending jumped 1.3 percent,
the largest gain since October 2001, after a 0.3 percent increase in July. Spending
was up for a fourth straight month and beat expectations for a 1.1 percent gain.
Optimism over the rise in spending, which normally accounts for over two-thirds
of U.S. economic activity, was clouded by reports showing a rise in the number
of people applying for first-time unemployment benefits last week and a below
forecast expansion in manufacturing activity last month.
Source: Reuters
Slide
in Manufacturing Activity Sends Stocks Lower
Thursday, October 1, 2009
Stocks began the fourth quarter on a down note Thursday,
falling sharply amid more signs that the economy's recovery will be slow
and bumpy.
Major stock indicators fell more than 1 percent after disappointing reports
on the manufacturing industry and the labor market overshadowed good
news on housing and consumer spending. The Dow Jones industrial average
fell 145 points. Bond prices rose as investors nervously sought a safer
place for their money.
The Institute for Supply Management said its index of manufacturing activity
in September slipped to 52.6 from 52.9 in August, well below analysts'
expectations of 54. It was the second month in a row the reading came
in above 50, which indicates growth, after contracting for 18 months.
Earlier Thursday, the Labor Department said new claims for jobless benefits
rose more than expected to 551,000, evidence that the labor market is
still struggling and that jobs remain scarce. Economists polled by Thomson
Reuters had predicted claims to rise to 535,000.
The increase came after three weeks of declines and a day before the
Labor Department's monthly report on employment. Economists expect that
the unemployment rate rose to 9.8 percent in September from 9.7 percent
in August.
Better reports on housing and consumer spending weren't enough to stem
the stock market's losses.
Several economic reports this week have already raised doubts among investors
about the strength of the recovery and whether this year's powerful stock
market rally should continue. The Dow Jones industrial average lost nearly
30 points Wednesday, as a disappointing report on Midwestern manufacturing
contributed to the bearish tone.
Despite ending on a wobbly note in September, stocks still put in a stellar
third quarter. Both the Dow Jones industrials and the Standard & Poor's
500 index gained 15 percent. It was the Dow's best three-month period
since the fourth quarter of 1998.
Source:
Associated Press
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Mortgage
Demand Falls Despite Lower Rates
Wednesday. September 30, 2009
U.S. mortgage applications fell last week despite
the lowest loan rates in four months, the Mortgage Bankers Association
said on Wednesday, in another sign that housing will likely recover slowly
from its three-year plunge.
Home loan applications fell a seasonally adjusted 2.8 percent in the
September 25 week, driven down by a 6.2 percent drop in demand for purchase
loans and a 0.8 percent decline in refinancing requests.
Borrowing costs inched closer to record lows, with average 30-year rates
dipping 0.03 percentage point to 4.94 percent.
The 30-year rates were the lowest since the week ended May 22, at 4.81
percent, after hitting an all-time low of 4.61 percent in March, according
to the industry group. A year ago, before intensive government interventions,
30-year rates averaged 6.33 percent.
Source:
Reuters
U.S.
Q2 Home Foreclosures, Mortgage Delinquencies Up
Wednesday, September 30, 2009
The number of home foreclosures
in process and delinquent mortgages rose during the second quarter,
while home retention actions also increased, U.S. bank regulators said
on Wednesday.
Foreclosures jumped 16 percent to 2.9 percent of serviced mortgages,
while home retention actions such as loan modifications rose 21.7 percent,
the Office of the Comptroller of the Currency and the Office of Thrift
Supervision said in a report.
"
The mortgage data reported for the second quarter of 2009 continued to
reflect negative trends influenced by weakness in economic conditions,
including high unemployment and declining home prices in weak housing
markets," the report said.
The report covers mortgages serviced by most of the industry's largest
mortgage servicers, whose loans make up about 64 percent of all mortgages
outstanding in the United States.
The regulators said there was a lull in newly initiated foreclosures
during the second quarter as mortgage servicers worked to implement the
federal "Making Home Affordable" program.
The $50 billion program, launched in March, is designed to stabilize
the housing market by helping up to 9 million Americans reduce their
monthly mortgage payments to more affordable levels.
The OCC and OTS said the emphasis on the program contributed to a dramatic
shift in the composition of home retention actions toward lowering payments.
Previously, the vast majority of loan modifications either did not change
or increased monthly payments.
The weak economy continued to drive up the number of delinquent mortgages.
The number of mortgages delinquent 30 to 60 days jumped 10.9 percent
during the second quarter to 3.2 percent of all mortgages covered by
the report.
The number of mortgages that were more than 90 days delinquent increased
11.5 percent, rising to 5.3 percent of serviced mortgages.
Source: Reuters
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Economy Shrinks Less in Second Quarter
Wednesday, September 30, 2009
The U.S. economy contracted
in the second quarter at a slower pace than previously thought, while
a surprise slide in manufacturing activity in the country's Midwest
region in September pointed to a patchy recovery from recession.
Gross domestic product, which measures total goods and services output
within U.S. borders, fell at a 0.7 percent annual rate instead of the
1.0 percent decline it reported last month, the Commerce Department said
on Wednesday.
This was better than market expectations for a 1.2 percent contraction
and an improvement from the first quarter, when GDP fell at a 6.4 percent
rate.
On the manufacturing front, however, the Institute for Supply Management-Chicago
said its business barometer fell to 46.1 in September from 50.0 in August,
with a reading above 50 indicating expansion. Economists had expected
a rise to 52.0.
"
What it comes down to is how much of this recovery is going to be sustainable.
I'm not a believer yet that this is a robust economy. This is going to
be a very frustratingly weak growth period," said Robert Macintosh,
chief economist at Eaton Vance Corp. in Boston.
Source: Reuters
U.S.
Consumer Woes Overshadow Housing Cheer
Tuesday,
September 29, 2009
U.S. house prices rose for a third month in July,
but consumer confidence fell unexpectedly in September as the worst
job market in 26 years fueled worries about personal finances, private
reports showed on Tuesday.
The reports show it is still early days for the economic rebound, following
the worst recession in decades, and it could take a long time before
consumers begin to contribute to growth.
Also, despite improvements elsewhere in the economy and a roaring stock
market rally since March, the weakness of the consumer sector bodes ill
for the year-end, which is traditionally a period of heavy shopping and
spending.
"
While not as pessimistic as earlier this year, consumers remain quite
apprehensive about the short-term outlook and their incomes," said
Lynn Franco, director of the Conference Board Consumer Research Center.
" With the holiday season quickly approaching, this is not very encouraging
news."
Source: Reuters
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Drop
in Consumer Confidence Sends Stocks Lower
Tuesday, September 29, 2009
A report showing Americans are still downbeat on the
economy is giving investors reason to sell stocks. The market failed
to hold on to early gains and is edging lower midday after the Conference
Board said its consumer confidence index fell to 53.1 in September, down
from 54.5 in August and much lower than the reading of 57 that economists
had been expecting.
Many analysts say a true turnaround in the economy can't occur until
consumers start spending again and employers create more jobs.
The disappointing report was tempered by an increase in home prices in
July.
The Dow Jones industrials are down 25 at 9,763. The Standard & Poor's
500 index is down 1 at 1,061, and the Nasdaq composite index is down
7 at 2,122.
Source: Associated
Press
Index
Shows Home Prices Rose for 3rd Month in July
Tuesday September 29, 2009
Home prices rose for the third month in a row in July,
new data Tuesday showed, more proof a fragile housing recover is underway.
The Standard & Poor's/Case-Shiller home price index of 20 major cities
rose 1.2 percent from June to a reading of 143.05. Though home prices
are still 13.3 percent below July a year ago, the annual declines have
slowed in all 20 cities for the sixth straight month.
"
We expected another gain but this is remarkable," wrote Ian Shepherdson,
chief U.S. Economist for High-Frequency Economics. He noted the index
has risen at an 8 percent annualized rate in the three months to July,
the best performance since early 2006.
The index, however, is down about 33 percent from the peak in mid-2006.
Home prices are now at levels not seen since the third quarter of 2003.
And prices in Las Vegas, Detroit and Seattle are still falling, on a
seasonally adjusted basis.
Prices in Las Vegas, one of the most speculative markets during the boom,
are down more almost 55 percent from their peak. In August, almost 80
percent of home resales in Nevada were either a foreclosure or a sale
below the value of the mortgage, according to a survey by the National
Association of Realtors.
The Detroit housing market is reeling from layoffs in the automotive
industry. Seattle, by contrast, was one of the last areas to enter the
downturn so prices there have yet to hit bottom.
Source:
Associated Press
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Survey Show Credit Woes Threaten Housing Recovery
Monday, September 28, 2009
Nearly two-thirds of single-family home builders
are reporting a severe lack of credit for housing production,
threatening the fragile housing recovery before it has time to
take hold, according
to a new builder survey of acquisition, development and construction
(AD&C) financing conducted by the National Association
of Home Builders (NAHB).
"Across the country, home builders and developers are reporting
a deterioration in credit availability and intensifying pressure on borrowers
with outstanding loans," said NAHB Chairman Joe Robson, a home builder
from Tulsa, Okla. "Lenders are cutting off loans for viable new
housing projects and producing unnecessary foreclosures and losses on
AD&C loans. With the pending expiration of the $8,000 first-time
home buyer tax credit, these challenges threaten to halt any positive
developments we have seen in the housing market in recent months."
In the latest NAHB
survey of AD&C financing conditions, 63 percent
of builders stated that the availability of credit for single-family
construction loans worsened in the second quarter of 2009.
Builders reporting deteriorating credit conditions cited the following
reasons: 80 percent said that lenders are lowering the allowable loan-to-value
ratio, 76 percent reported that lenders are not making new loans, 75
percent stated that lenders are reducing the amount they are willing
to lend and 62 percent said that lenders are requiring personal guarantees
or collateral not related to the project.
Two-thirds of respondents reported putting single-family construction
projects on hold until the financing climate gets better.
While federal banking
regulators continue to maintain that they are not instructing institutions
to stop making loans or to indiscriminately
liquidate outstanding loans, builders responding to the survey cited
the top reason that lenders have given them for restricting the availability
of new loans or for tightening the terms of outstanding loans is that "regulators
are forcing lenders to do it."
NAHB believes that regulators and lenders should provide leeway to residential
construction borrowers who have loans in good standing by providing flexibility
on re-appraisals, loan modifications and perhaps forbearance on loans
to give builders time to complete and sell their inventory.
"There can be no meaningful economic recovery until the flow of
credit is restored to housing," said Robson.
Source: NAHB
New Home Sales Rise for 5th Straight Month
Friday, September 25, 2009
Sales of newly constructed homes rose for
the fifth straight month in August, a government report said Wednesday.
New home sales inched up 0.7% last month to a seasonally-adjusted annual
rate of 429,000, the Commerce Department reported. That was an increase
from a downwardly-revised reading of 426,000 in July.
August sales came in well below economists' consensus estimate of 440,000,
compiled by Briefing.com
New home sales were also 3.4% below August 2008, when the estimate
stood at a 444,000 annual rate.
Source: CNNMoney.com
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U.S. Home Sales,
Jobless Claims Unexpectedly Drop
Thursday, September
24, 2009
The number of U.S.
workers filing new claims for jobless benefits fell last week, but
a surprise drop in sales of
existing homes in August suggested the economy's recovery from a severe
recession would be slow.
A report from the Labor Department on Thursday showed new claims for
unemployment benefits unexpectedly fell 21,000 to a seasonally adjusted
530,000 last week. Analysts polled by Reuters had expected initial claims
to rise to 550,000.
Separately, the National Association of Realtors said sales of existing
homes fell 2.7 percent to an annual rate of 5.10 million units from 5.24
million units in July. That compared to market expectations for a rise
to a 5.35 million unit pace.
The report, however, did little to change views the economy is recovering
from its worst recession in 70 years. The Federal Reserve -- the U.S.
central bank -- on Wednesday acknowledged activity had picked up and
noted the improvement in the housing sector when it left its key overnight
lending rate near zero.
U.S. stock indexes erased gains after the release of the housing data,
falling into negative territory, while prices of government bonds, a
haven in times of economic turmoil, rose.
NAR Chief Economist Lawrence Yun described the decline as a "mild
retreat" after a strong gain in July, adding that the August pace
was the second-highest in 23 months. Compared to August last year, however,
sales were up 3.4 percent.
"
Some of the give-back in closed sales appears to result from rising numbers
of contracts entering the system, with some fallouts and backlogs contributing
to a longer closing process," Yun told reporters
Source: Reuters
U.S. Home Loan Demand
Hits Highest Since Late May
Wednesday, September, 23, 2009
U.S. mortgage applications jumped last week to their
highest since late May as interest rates tumbled below 5 percent, data
from an industry group showed on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of
mortgage applications, which includes both purchase and refinance loans,
for the week to September 18 increased 12.8 percent to 668.5, the highest
since the week ended May 22.
While consumers clamored for home refinancing loans, their appetite was
also robust for applications to buy a home, a tentative early indicator
of sales. The overall trend bodes well for the hard-hit U.S. housing
market, which has been showing signs of stabilization.
Eric Belsky, executive director at Harvard University's Joint Center
for Housing Studies, said several months of improvement in new and existing
home sales is a positive sign.
"
Low interest rates on mortgages are important to the fledgling housing
recovery," he said, and this has made a significant impact on the
affordability front.
"
While an uptick may bring buyers anxious that rates will keep rising
into the market temporarily, a material increase in rates could threaten
the rebound," he said.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged
4.97 percent, down 0.11 percentage point from the prior week and the
first time since the week to May 22 the rate on this most widely used
home loan was below 5 percent.
Source: Reuters
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U.S.
Economy at "Beginnings" of
Recovery: Geithner
Tuesday, September, 22, 2009
U.S. Treasury Secretary Timothy Geithner on Tuesday
said that the U.S. economy appeared to be picking up steam and G20 leaders
gathering in Pittsburgh this week would strive to ensure the recovery
was balanced.
"
We are at the very beginnings of this recovery ... We need to make sure
that we keep at this, so we have in place a recovery that is going to
be self-sustaining, led by private demand, (and) a financial system that
can actually provide the credit that is needed," he told
a press briefing.
G20 leaders will meet in Pittsburgh on September 24-25 and Geithner said
the aim was to take stock of the world economy and ensure better growth
in the future.
"
To make sure that as we recover from this crisis we are laying the seeds
for a more balanced, more sustainable recovery. That is the agenda," Geithner
said.
U.S. officials want the G20 to adopt a framework aimed at lifting growth
in export-orientated members like China, Germany and Japan, while boosting
savings and curbing consumption among import-hungry debtors like the
United States.
Source: Reuters
U.S. Mortgage
Delinquencies Set Record
Monday,
September 21, 2009
High U.S. unemployment keeps pushing up the rate
of mortgage delinquencies, which could in turn drive personal bankruptcies
and home foreclosures, monthly data from the Equifax Inc credit bureau
showed on Monday.
Among U.S. homeowners with mortgages, a record 7.58 percent were at least
30 days late on payments in August, up from 7.32 percent in July, according
to the data obtained exclusively by Reuters.
August marked the fourth consecutive monthly increase in delinquencies,
and the report showed an accelerating pace. By comparison, 4.89 percent
of mortgages were 30 days past due in August 2008, while in August 2007,
the rate was 3.44 percent, Equifax data showed.
The rate of subprime mortgage delinquencies now tops 41 percent, up from
about 39 percent in each of the prior five months.
The results, which correlate with consumer bankruptcy filings, suggest
U.S. homeowners remain under financial stress despite signs of improving
sentiment and fundamentals in the U.S. housing market.
August bankruptcy filings were up 32 percent from a year earlier, compared
with a 35 percent year-over-year increase in July.
Still, while more Americans were late with mortgage payments, they are
keeping up with other bills. The proportion of credit card accounts at
least 60 days past due was down in August for the third straight month,
while subprime card delinquencies also fell.
That improvement in delinquency rates partly reflects risk-aversion among
issuers, which have cut the number of cards by 82 million, or 19 percent,
over the past year, while slashing credit limits by $721 billion, to
about $3.6 trillion.
The number of new cards being issued is down even more dramatically.
In June, 2.6 million new cards were issued, compared with 4.7 million
a year earlier.
Lenders are increasingly targeting consumers with high credit scores,
Equifax found. While in 2007, about one in five new cards went to people
with a credit score above 760, such consumers account for two in five
new cards in 2009. Equifax found similar trends in auto loans.
"
The data from August further confirms that we're witnessing a dramatic
change in consumer habits," said Dann Adams, president of Equifax's
Consumer Information Solutions group.
Total consumer debt is down more than $300 billion, or almost 3 percent,
from its peak in September 2008, Adams said, while the savings rate is
nearing 5 percent, "a level we haven't seen in years."
Source: Reuters
Housing
Industry Groups Agree on Need to Reform Appraisal Process
Monday,
September 21, 2009
The National Association of Home Builders
(NAHB) today hosted a Residential Real Estate Appraisal Summit
with federal
regulatory agencies and the major housing and financial institution
stakeholder and appraisal organizations to discuss constructive solutions
to appraisal problems.
Among the problems discussed at the summit was the use by some appraisers
of foreclosed or other distressed properties as comparables without proper
adjustments. Summit participants also addressed unintended consequences
from the implementation of the Home Valuation Code of Conduct (HVCC)
which are impeding the ability to obtain appraisals of the quality required
in today's distressed markets.
These inappropriate practices, including reports that some appraisers
are working in areas where they don't know the market, are driving down
home values and impacting home sales as inaccurate appraisals are coming
in below the contract sales price. This is causing unwarranted downward
pressure on home prices at a time when housing and the economy are struggling
to emerge from the worst downturn in decades.
Following
the meeting, the leadership of NAHB, the National Association of REALTORS® and the Mortgage Bankers Association were united in
calling for immediate action to address their appraisal-related concerns,
including clarifications with regard to the HVCC and the establishment
of "best practices" for the appraisal process. The groups also
urged the regulators to adopt and enforce clear, concise regulatory guidance
on the use of distressed and/or foreclosed properties that will allow
appraisers to develop realistic valuations based on sales that are truly
comparable.
"Appraisers generally are only required to inspect the exterior
of a property that is being used as a comparable because they are normally
unable to enter these homes and examine their interiors," said NAHB
Chairman Joe Robson, a home builder from Tulsa, Okla. "But all too
often, properties that have been subject to foreclosure or distress sales
have issues related to deferred maintenance or internal damage that an
external inspection simply cannot detect. You can't compare these properties
to new homes that are in market-ready condition. NAHB believes that it's
time for appraisers to have regulatory guidelines that acknowledge such
realities."
"NAR supports the independence of appraisers and the integrity
of the appraisal process," said NAR President Charles McMillan. "An
accurate appraisal is an important part of any real estate transaction,
and reforming the appraisal process is critical to the nation's housing
recovery.
Quality
appraisals are threatened by unintended HVCC consequences and an inconsistency
among the various federal regulators. As the leading
advocate for housing issues, NAR calls on the federal government to establish
consistent appraisal rules for FHA and the GSEs."
"Ensuring that appraisals are fair and accurate is the lynchpin
of our secured lending system," said Robert E. Story, Jr., CMB,
Incoming Chairman of the Mortgage Bankers Association. "As a lender,
it is crucial that I can count on the fact that an appraisal is correct
and that the appraiser has not been subject to pressure from any interested
party to the transaction. We want to work with appraisers and regulators
to ensure that every appraisal results in an honest, truthful evaluation
of a property's value."
Source: NAHB
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Rate Tops 12% in 5 States
Friday, September 18, 2009
Five states posted jobless rates above 12%
in August, according to federal data released Friday.
California, Nevada and Rhode Island each hit record-high rates, the Labor
Department said.
Michigan led the nation in unemployment, with a rate of 15.2%, while
Nevada was next at 13.2% and Rhode Island was third at 12.8%. California
and Oregon were tied for the fourth spot, each with unemployment at 12.2%.
In August, 27 states and the District of Columbia recorded month-over-month
unemployment rate increases, while 16 states posted a decrease in unemployment
and seven saw rates hold steady.
The total number of nonfarm jobs fell in 42 states and the District of
Columbia, while 8 states saw an increase.
The state-by-state unemployment report for August came after the government
reported earlier this month that American employers cut 216,000 jobs
in August, sending the nationwide unemployment rate to 9.7% from 9.4%
in July.
Lowest rates: North Dakota posted the lowest jobless rate in August,
at 4.3%. It was followed by South Dakota, at 4.9%; Nebraska, with 5%;
Utah, at 6%, and Virginia, at 6.5%.
Biggest over-the-year increases: All states and the District of Columbia
recorded statistically significant increases in their jobless rates from
August 2008.
Michigan reported the largest unemployment rate increase over the year,
at 6.6 percentage points.
Three other states saw rates climb more than 5 percentage points: Nevada's
unemployment rate has climbed 6.2 points year over year, while Oregon's
rate jumped 5.7 points, and Alabama's rate increased 5.2 points. West
Virginia saw the fifth-largest annual increase of 4.8 percentage points.
Largest over-the-month increases: Six states posted statistically significant
over-the-month unemployment rate increases in August.
New Mexico's was highest, at 0.5 percentage points, followed by New Jersey,
New York and Oregon -- all three of which reported a 0.4 point increase.
California and Iowa each posted a 0.3 point increase over the month.
The District of Columbia also reported a jump, of 0.5 percentage points.
Biggest over-the-month decreases: Four states reported statistically
significant decreases in unemployment over the month.
Indiana's jobless rate dropped by 0.7 percentage point, Colorado's fell
0.5 percentage point, and Kansas and Virginia fell 0.4 point each.
Source: CNNMoney.com
More
Signs of a Housing Revival
Thursday, September 17, 2009
New home building increased in August, a government
report said Thursday, further signaling that home builders are regaining
their confidence in the housing market recovery.
The Census Bureau reported Thursday that builders broke ground for 598,000
new homes during August, up 1.5% from a revised 589,000 in July. That was
considerably higher than industry experts were predicting: The consensus
analyst forecast compiled by Briefing.com was for 583,000 new starts.
Building permits rose 2.7% to 579,000 from a revised 564,000 in July.
On Wednesday, the National Association of Home Builders reported their
index of homebuilder confidence had risen a point to 19, its highest level
since May 2008.
Helping to boost demand for new homes has been the first-time homebuyer
tax credit, which has enabled many builders to reduce their inventories
of unsold homes.
"
Many builders have not only reduced excess inventory, but now are actually
reporting such low inventory that they need to start more homes to replace
those they've just sold," said Brad Hunter, chief economist for Metrostudy,
a real estate analytics firm.
Both starts and permits are still well off from their levels of a year
ago. The number of starts is down 29.6% from 849,000 last August, and permits
dropped 32.4% from 857,000 last year.
The housing starts report was the latest in a series of releases that indicate
that the market may have bottomed. These include improvement in new home
sales, existing home sales and housing prices.
Source: CNN/Money
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Single-Family Starts Ease as Credit Deadline Looms
Thursday, September, 17, 2009
Production of new single-family homes slowed in
August as the expiration date for an important buyer incentive drew
nearer, according to figures released by the U.S. Commerce Department
today. While overall housing starts rose 1.5 percent to a seasonally
adjusted annual rate of 598,000 units for the month, single-family
starts declined 3 percent to a rate of 479,000 units, ending what had
been a five-month run of improvements.
"With the $8,000 first-time home buyer tax credit set to expire
at the end of November, the window is now basically closed for being
able to start a new home that can be completed in time for purchasers
to take advantage of that," said Joe Robson, Chairman of the National
Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. "Builders
are therefore pulling back on new construction at this time. Clearly
Congress must act now to extend the tax credit if we are to keep the
market moving toward a recovery."
"The tax credit has been helping buoy demand for new homes since
its passage in February, but builders are concerned about what happens
after it is gone," said NAHB Chief Economist David Crowe. "On
top of the credit's impending expiration, builders continue to grapple
with a severe lack of credit for housing production loans and inappropriately
low appraisals that are tied to the use of distressed properties as comps
- both of which blunted the tax credit's positive effect. Together, these
three challenges threaten to completely stifle the upward momentum we've
seen in the first half of 2009."
NAHB is calling on Congress to extend the first-time home buyer tax
credit for another year and to offer it to all income-eligible buyers
of primary residences. In addition, NAHB is urging Congress to help eliminate
the credit crunch, correct faulty appraisal practices and expand Net
Operating Loss tax provisions that can help avoid more layoffs.
A 3 percent decline in single-family housing starts for August essentially
erased the previous month's gain, bringing production back to a 479,000-unit
annual rate. Single-family permits also edged downward in August, by
two-tenths of a percent to a seasonally adjusted annual rate of 462,000
units, ending what had been a four-month run of gains. Meanwhile, multifamily
housing starts, which tend to display greater volatility on a month-to-month
basis, rose 25.3 percent from an extremely low level in the previous
month, to a seasonally adjusted annual rate of 119,000. Multifamily permit
issuance rose 16 percent from an all-time low in July, to a 117,000-unit
rate.
Source: NAHB
Builder Confidence Edges Up Again in September
Wednesday, September 16, 2009
Builder confidence in the market for newly built,
single-family homes edged higher for a third consecutive month in
September, according to the latest National Association of Home Builders/Wells
Fargo Housing Market Index (HMI), released today. The HMI rose one
point to 19 this month, its highest level since May of 2008.
"Builders are seeing some improvement in buyer demand as a result
of the first-time home buyer tax credit, and low mortgage rates and strong
housing affordability have also helped to revive some optimism," noted
Joe Robson, chairman of the National Association of Home Builders (NAHB)
and a home builder from Tulsa, Okla. "However, the window is now
basically closed for being able to start a new home that can be completed
in time for buyers to take advantage of the tax credit before it expires
at the end of November, and builders are concerned about what will keep
the market moving once the credit is gone. Congress needs to act now
to keep the credit from expiring just as its intended effect on buyer
demand is starting to materialize."
"Today's report indicates that builders are starting to see some
glimmers of light at the end of the tunnel in terms of improving sales
activity," said NAHB Chief Economist David Crowe. "However,
the fact that the HMI component gauging sales expectations for the next
six months slipped backward this month is a sign of their awareness that
this is a very fragile recovery period and several major hurdles remain
that could stifle the positive momentum. Those hurdles include the impending
expiration of the $8,000 tax credit as well as the critical lack of credit
for housing production loans and continuing problems with low appraisals
that are sinking one quarter of all new-home sales. These concerns need
to be addressed if we are to embark on a sustained housing recovery that
will help bolster economic growth."
Source: CNN/Money
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U.S.
Mortgage Demand Drops, Supply Caps Improvement
Wednesday, September, 16, 2009
Demand for U.S. home loans fell by more than 8 percent
as fixed mortgage rates rose last week in a banking period shortened
by the Labor Day holiday, the Mortgage Bankers Association said on Wednesday.
Total applications were nonetheless at one of the highest levels seen
since early June, with borrowers still eager to take advantage of the
federal first-time home buyer tax credit before the program closes at
the end of November.
Borrowing costs stayed relatively low, which continues to foster demand
for potential buyers. But there is growing concern about whether housing
can sustain its recent momentum once some key government rescue programs
end.
As a result, the real estate industry is pressing Congress to extend
the tax credit to all buyers and increase the size to $15,000 from $8,000
in a program now set to end on November 30.
Another concern is the end-2009 deadline for Federal Reserve mortgage-related
debt purchases of up to $1.45 trillion -- aimed at keeping loan rates
down.
"
If the first-time home buyer tax credit expires at the end of November
and if the Federal Reserve were to significantly scale back their mortgage
(bond) purchases early in 2010, the housing market could hit a wall very
quickly," said senior Bankrate financial analyst Greg McBride in
North Palm Beach, Florida.
"
I don't think that the Fed is going to do anything rash," he said. "I
think they will slowly back away from the table so as to keep a lid on
mortgage rates."
Source: Reuters
Foreclosures: The struggle continues
Thursday, September 10, 2009
The foreclosure crisis grinds on amid signs of hope.
A report released Thursday shows that substantially fewer people had
their homes repossessed in August.
Unfortunately, a large number of Americans are still falling behind on
their payments.
A total of 76,134 troubled borrowers lost their homes in August, but
that is 12.7% fewer than in July, according to RealtyTrac, an online
marketer of foreclosed properties.
The pipeline of troubled borrowers remains full, however. Filings of
all kinds dropped only slightly, just 0.5%, from July.
According to RealtyTrac spokesman Rick Sharga, there are a couple of
possible explanations for the decline in bank repossessions, called REOs
in the industry.
"
It could be that the government-led mortgage modification programs are
finally gaining some traction," he said. "But it could
also be that the banks are still delaying repossessions of these
properties."
Because banks take big losses on REOs, they may leave delinquent borrowers
in their homes, especially where lenders already have a substantial amount
of vacant, unsold inventory.
Presumably, the borrowers are caring for
the properties, which saves banks the time and expense of upkeep and
maintenance.
Plus, there is always hope that some of these borrowers will "self-cure" --
or catch up on their loans without assistance -- which is better
for banks' bottom lines. In fact, a recent report from the Boston
branch
of the Federal Reserve found that 30% of borrowers who have missed
two mortgage payments eventually become current.
Increases in short sales could also be reducing the repossession statistics,
according to Duane LeGate, president of HBN Interactive, a short-sale
specialist. These are transactions in which lenders allow borrowers to
sell their homes for less than what they owe.
"
A lot of banks are delaying the foreclosure process if they see any kind
of chance of making a reasonable short sale," he said.
The reprieve in repossessions could be coming to an end, however. Sharga
expects a spate of payment problems to start this fall as interest rates
reset on some of the exotic mortgage products that proliferated during
the boom. Option ARMs (adjustable rate mortgages) in particular will
be a big problem.
Source: CNN/Money
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Home Loan Demand at 3-Month High
Wednesday,
September 9, 2009
U.S. mortgage applications surged last week
to their highest since late May as consumers sought to take advantage
of the lowest
interest rates in months, data from an industry group showed on
Wednesday.
The Mortgage Bankers Association said rates on 30-year fixed-rate mortgages
tumbled to a 3-month low, spurring a surge in demand for home refinancing
loans. Applications to buy a home, a tentative early indicator of sales,
also climbed, hitting their highest since early January.
The overall trend bodes well for the hard-hit U.S. housing market,
which has been showing signs of stabilization.
The MBA said its seasonally adjusted index of mortgage applications,
which includes both purchase and refinance loans, for the week to September
4 increased 17.0 percent to 648.3, the highest since the week ended
May 29.
Source: Reuters
Fed
Report Sees Signs U.S. Economy is Improving
Wednesday,
September 9, 2009
Half of the Federal Reserve's
12 districts saw evidence the U.S. economy had improved by the end of
August, although labor markets remained weak and retail sales were flat,
a Fed report said on Wednesday.
Dallas, Boston, Cleveland, Philadelphia, Richmond and San Francisco noted
gains. Other areas reported the economy was stable or showing signs of
stabilization while St. Louis said the pace of economic decline appeared
to be moderating.
"
Most districts noted that the outlook for economic activity among their
business contacts remained cautiously positive," the Fed's Beige
Book survey said.
The modestly upbeat report said most regions reported some improvement
in hard-hit residential real estate markets and an uptick in manufacturing.
Tempering those developments, Fed contacts reported that demand for
commercial property remained weak and that businesspeople in some areas
believed
recently higher vehicle sales levels were likely not sustainable after
the government's "cash for clunkers" incentive program lapses.
But even some of the gloomiest segments of the economy held glimmers
of hope, said the survey by the Fed -- the U.S. central bank.
"
Labor market conditions remained weak across all districts, but several
also noted an uptick in temporary hiring and a decline in the pace of
layoffs," the report said.
The Fed at its last policy-setting meeting held its benchmark short-term
interest rate steady near zero and said it would likely hold it there
for an extended period to guide the way to recovery.
Fed officials have said recently they expect a sluggish recovery with
persistently high unemployment. The U.S. jobless rate hit a 26-year high
of 9.7 percent in August.
Source: Reuters
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Treasury Sees Millions More Foreclosures
Wednesday September 9, 2009
Only 12 percent of U.S. homeowners eligible
for loan modifications under the Obama administration's housing
rescue plan
have had their mortgages reworked, and millions more foreclosures
are coming, the Treasury Department said on Wednesday.
A Treasury report showed 360,165 people had their monthly payments
reduced through August, up from 235,247 through July, but a senior
Treasury official
conceded much more must be done to soften the impact of a severe
and prolonged housing crisis.
"
The recent crisis in the housing sector has devastated families and communities
across the country and is at the center of our financial crisis and economic
downturn," Michael Barr, assistant Treasury secretary for financial
institutions, told a House Financial Services subcommittee.
Treasury has begun releasing monthly reports on the loan modification
program, called the Home Affordable Modification Program, or HAMP,
that it launched in February. At the time, it was suggested that
millions
of Americans might be able to get some relief through negotiations
with their mortgage lenders.
But the program, which pays cash incentives to mortgage servicers
to reduce monthly payments to 31 percent of a borrower's income,
is off
to a relatively slow start.
In July, Treasury said that just 9 percent of the estimated number
of homeowners eligible had had their payments reduced, so August's
12 percent
total represents only modest progress.
Barr said that Treasury was on track to achieve 500,000 trial modifications
by November 1. The modification becomes permanent once a borrower
makes three reduced monthly payments.
Barr said that "even if HAMP is a total success, we should still
expect millions of foreclosures" as administration and industry
efforts continue to stabilize a crisis-stricken housing sector.
Source: Reuters
U.S. Mortgage Applications Slip, Loan Rate Dip
Wednesday, September 2, 2009
U.S. mortgage applications
slid last week even as mortgage rates edged lower,
with requests for loans to buy
homes declining for the first time since early July, an industry
group said on Wednesday.
The Mortgage Bankers Association's applications index fell by a seasonally
adjusted 2.2 percent in the week ended August 28, as demand for both
purchase and refinance loans slipped.
Fixed 30-year mortgage rates averaged 5.15 percent last week, down
0.09 percentage point. This was still above the record low of 4.61
percent
set in March yet a year ago this borrowing cost was 6.39 percent.
Source:
Reuters
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U.S. Factory,Home Sales Data Signal Economic Recovery
Tuesday, September 1, 2009
The U.S. manufacturing sector grew in August for
the first time in over a year and a half, while pending home sales surged
to a two-year high in July, adding to mounting evidence the longest economic
slowdown since the Great Depression is ending.
The Institute for Supply Management said its index of national factory
activity rose to 52.9 in August from 48.9 in July. The median forecast
of 78 economists surveyed by Reuters was for a reading of 50.5.
A reading above 50 indicates expansion in the manufacturing sector. The
last time the index showed growth in the sector was in January 2008 with
a reading of 50.8. August was the highest since a reading of 52.9 in
June 2007.
The manufacturing and housing data pushed U.S. stocks higher and the
Nasdaq rose more than 1.0 percent while Treasury debt prices added to
losses with the 30-year bond falling more than a full point. The U.S.
dollar fell against the euro and rose against the yen.
"
Both reports are encouraging readings. I'm particularly encouraged by
new orders and spread between new orders and shipments. The manufacturing
recession is over. This is not necessarily a one-month event. This suggests
manufacturing activity will be picking up," said Jonathan Basile,
an economist with Credit Suisse in New York.
Regional U.S. regional surveys have shown business picking up steam in
August, though employment remained weak, consistent with fears the United
States could be in for a "jobless recovery."
Source: Reuters
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