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June Existing Home Sales Fall 5.1 Percent

Thursday,  July 22, 2010

U.S. existing home sales fell less sharply than expected to a three-month low in June, though the supply of unsold homes rose to the highest in almost a year, an industry group said on Thursday.

Sales fell 5.1 percent to an annual unit rate of 5.37 million units, the National Association of Realtors said. Economists polled by Reuters had expected an 8.1 percent decline to a 5.18 million pace in June.

There were about 3.99 million homes for sale at the end of June, a level that would take about 8.9 months to deplete at the current sales pace. That's the highest monthly supply since August 2009.
Sales have risen 9.8 percent since June 2009.

NAR chief economist Lawrence Yun said he expected the inventory of homes to rise to higher than a 10-month supply in the coming months as the pace of sales for homes under contract has declined.

That increase in the inventory of unsold homes could push prices down if the higher supply remains unsold for a prolonged period.

The median home sales price in June was $183,700, a 1.0 percent increase from the prior year.

Source:  Reuters

Mortgage Rates Hit 4.56 PCT., New Record Low

Thursday, July 22, 2010

Mortgage rates fell to a new record low for the fourth time in five weeks. But low rates haven't been enough to lift a struggling housing market.

The average rate for 30-year fixed loans this week was 4.56 percent, down from 4.57 last week, mortgage company Freddie Mac said Thursday. That's the lowest since Freddie Mac began tracking rates in 1971.

The last time home loan rates were lower was during the 1950s, when most mortgages lasted just 20 or 25 years.

The rate on the 15-year fixed loan dropped to 4.03 percent, down from 4.06 percent last week and the lowest on records dating back to 1991.

Rates have fallen since the spring. Investors worried about the European debt crisis have shifted money into the safety of Treasury bonds. That has forced those yields down. Mortgage rates tend to track yields on Treasury debt.

However, low rates have yet to spark home sales and refinancing activity remains moderate.

Sales of previously occupied homes fell in June and are expected to keep sinking. The National Association of Realtors said Thursday that last month's sales fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million.

The housing market stalled after federal tax credits for homebuyers expired at the end of April. Home sales have dropped off, homebuilder confidence has waned and consumer sentiment is in the dumps.

It's unlikely low mortgage rates will bolster housing. Rates have hovered near historic lows for more than a year, so many people have already taken advantage of them to buy or refinance a home.

And many of those who haven't wouldn't qualify for a loan. They either owe more than their homes are worth, have shaky credit or have lost their jobs.

To calculate the national average, 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.

Rates on five-year adjustable-rate mortgages averaged 3.79 percent, down from 3.85 percent a week earlier. Rates on one-year adjustable-rate mortgages fell to an average of 3.70 percent from 3.74 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 a point for 30-year, 15-year and 1-year loans. The average fee for 5-year loans was 0.6 of a point.

Source: Associated Press

Most Americans Think Economy Yet to Hit Bottom

Thursday, July 22, 2010
 
Nearly two-thirds of Americans believe that the economy has yet to hit bottom, meaning a double-dip recession is expected, a nationwide survey from Citigroup showed Thursday.

The quarterly report, conducted by Hart Research Associates, revealed that 62 percent of people asked were still not counting on a rebound, which is 3-point decline from the March reading and almost as bad as last September's result of 63 percent.

The employment picture painted by the data was bleak too with 85 percent of respondents reporting that job opportunities were only fair or poor. Nearly half of those asked said that the job market was poor.

"Clearly, the mood of Americans has been heavily influenced by the unemployment numbers here at home and the news of economic woes in Europe," Jonathan Clements, director of financial education at Citi Personal Wealth Management, said in a statement.

The survey also showed that Americans' expectations for when the economy will stabilize for their households have been pushed further into the future. Nearly two thirds think that their households will not see a stable financial situation for at least two or three years, it said.

On the positive side, Americans' views on current economic conditions and the outlook for their own personal financial situations are improving or holding steady, the survey said.

Twenty-four percent said that the local economy where they live is good or excellent, which is up from 19 percent in March, the report said.

"If you dig deeper, consumers are actually feeling a bit better about their own finances and the local economic outlook," Clements said.

"The big question is, could the gloomy news become a self-fulfilling prophesy, prompting consumers to restrain their spending, thus hurting the economic recovery?" he added.

Meanwhile, as many as 25 percent of people surveyed said that one form of debt or other poised a major challenge or is becoming unmanageable, the survey showed.

"It is startling to see more than a fifth of high-income earners express concerns about their debt," Clements said. "This may speak to their overconfidence during the boom years, as they took on first and second mortgages to buy real estate and pay other expenses."

Source:  Yahoo Finance

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Housing Starts Fall, Permits Offer Ray Of Hope

Tuesday, July 20, 2010

Housing starts hit their lowest level in eight months in June, further evidence the economy lost momentum in the second quarter, but a rise in permits offered hope that homebuilding was poised to pick up.

The Commerce Department said on Tuesday housing starts dropped 5.0 percent to a seasonally adjusted annual rate of 549,000 units, the lowest since October. It was the second straight month of declines in groundbreaking activity and was well below market expectations for a 580,000-unit rate.

May's starts were revised down to show a 14.9 percent decline, previously reported as a 10.0 percent drop. Compared to June last year, starts were down 5.8 percent, the biggest decline since November.

The only positive sign was an unexpected 2.1 percent rise in applications for building permits to a 586,000-unit annual pace. That followed a 5.9 percent drop in May and compared to analysts' expectations for a slip to a 570,000 rate.

"It's not surprising that housing starts declined given the significant inventory of unsold homes and until that inventory of unsold homes comes down we're not likely to see improvement in starts," said Hugh Johnson, chief investment officer at Hugh Johnson Advisors in Albany, New York.

U.S. stock index futures trimmed losses after the housing data while Treasury debt prices held gains. The U.S. dollar was firmer versus the euro and the yen.

Weak building data is the latest in a series of indicators to imply the recovery from the longest and deepest recession since the 1930s took a step back in the second quarter, much earlier than economists had initially anticipated.

They don't believe output is contracting but acknowledge that the risks of a double-dip recession have increased.

The housing market was one of the key triggers of the economic downturn and its recovery has leaned heavily on the government. Following the end of a tax credit for home buyers in April, home construction and sales have dropped sharply.

Housing starts were pulled down last month by a 21.5 percent drop in the volatile multifamily segment to a 95,000-unit annual pace, erasing May's 4.3 percent rise. Groundbreaking for single-family homes slipped 0.7 percent to an annual rate of 454,000 units, the lowest since May 2009.

Home completions surged a record 26.2 percent to an 886,000-unit pace, the highest level since December 2008.

The inventory of houses under construction dropped 5.5 percent to a record low 450,000 units in June while units authorized but not yet started rose 3.6 percent to 91,500.

Source: Reuters

Home Construction Sinks to Lowest Level Since Oct.

Tuesday July 20, 2010

Home construction plunged last month to the lowest level since October as the economy remained weak and demand for housing plummeted.

But driving the June decline was a more than 20 percent drop in condominium and apartment construction, which makes up a small but volatile portion of the housing market. Construction of single-family homes, the largest part of the market, was down slightly. It dropped 0.7 percent.

Overall, construction of new homes and apartments in June fell 5 percent from a month earlier to a seasonally adjusted annual rate of 549,000, the Commerce Department said Tuesday. May's figure was revised downward to 578,000.

One bright area of the report was an increase in building permit applications, which are a sign of future activity. They rose 2.1 percent from a month earlier to an annual rate of 586,000, however this was also driven by apartment construction.

A slumping job market and competition from foreclosed properties have forced builders to limit construction, especially after tax credits that spurred sales expired at the end of April.

"The housing market remains the Achilles heel of the recovery," said M. Cary Leahey, a senior economist at Decision Economics. "It is hard to imagine confidence recovering to healthy levels until the housing market experiences much less distress."

Source: Associated Press

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Source: Reuters

Tough Choices Ahead for Housing System

Thurday, July 15, 2010

Faced with a lose-lose proposition, Congress put off its decision on the fate of mortgage finance companies Fannie Mae and Freddie Mac, perhaps hoping the housing market recovers before losses get too big.

The financial regulatory overhaul, approved by Congress on Thursday, steered clear of reorganizing the government sponsored enterprises -- companies at the center of a U.S. housing crisis that drove the world into recession.

Both political parties agree a hybrid system that lets shareholders profit in the good times while taxpayers pay in the bad is unsustainable. But neither has come up with a workable plan to do that without inflicting more harm on the still-suffering housing market and the broader economy.

Given the bruising fight that took place over new rules for Wall Street in the wake of the worst financial crisis since the Great Depression, wholesale changes to the U.S. housing finance system could be too much for Congress to handle.

Edward Pinto, a former top official at Fannie Mae who now works as a consultant to private sector mortgage lenders, notes that each passing day makes it harder to change the system.

"The longer this goes on the less likely they are going to be able to undo Fannie and Freddie and we are going to get stuck with them in some sort of zombie-like structure," Pinto said.

The Obama administration now says it will lay out a vision for Fannie Mae FNMA.OB) and Freddie Mac FMCC.OB) in the new year. But the new year also brings what is virtually certain to be at least a smaller majority for the ruling Democrats.

And White House Press Secretary Robert Gibbs acknowledged on Sunday what many political observers have said for months: it is possible Republicans could gain control of the U.S. House of Representatives in the November mid-term elections.

Either scenario would make substantial changes to Fannie Mae and Freddie Mac more difficult as many Republicans want to abolish them and many Democrats want to ensure there is some mechanism to promote affordable housing.

Two possible paths are filled with pitfalls.

Fully nationalize them and it puts the burden of what could be hundreds of billions of dollars in losses on the backs of taxpayers. Privatize them and the flow of home loans could dry up, tanking the real estate market.

Source: Reuters

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Mortgage Rates Remain at Lowest Level in Decades

Thursday, July 15, 2010

Mortgage rates were unchanged this week at the lowest point in decades, but it hasn't been enough to jump-start the housing market.

Government-sponsored mortgage buyer Freddie Mac said Thursday the average rate for 30-year fixed loans this week was 4.57 percent. That's the same as a week earlier and the lowest since Freddie Mac began tracking rates in 1971.

The last time home loan rates were lower was the 1950s, when most mortgages lasted just 20 or 25 years.

Rates have fallen since the spring. Investors, concerned with the European debt crisis, have poured money into the safety of Treasury bonds. Treasury yields have fallen and so have mortgage rates, which tend to track yields on U.S. debt.

However, low rates have yet to fuel home sales and have sparked only a modest increase in refinancing activity.

The housing market has slowed since federal tax credits for homebuyers expired at the end of April. And the latest decline in mortgage rates is unlikely to boost the market.

Mortgage rates have hovered near record lows for some time, so most people who can afford to buy homes or qualify to refinance their loans have already done so in the past 18 months. Doing so again wouldn't be worth the cost for most.

Meanwhile, millions of Americans are unable to take advantage of the low rates. Many have seen the value of their homes plummet and have little or no equity. Or they lack good credit or steady income to get or refinance a mortgage.

Rates could go lower and still not budge the housing market, analysts say. That's because a person without a job can't afford a home and a person worried about losing their job is unlikely to do so either.

To calculate the national average, 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.

Rates on 15-year fixed-rate mortgages decreased to an average of 4.06 percent, down from 4.07 percent last week. Rates on five-year adjustable-rate mortgages averaged 3.85 percent, up from 3.75 percent a week earlier.

Rates on one-year adjustable-rate mortgages fell to an average of 3.74 percent from 3.75 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 all types of loans in Freddie Mac's survey averaged 0.7 a point.

Source: Associated Press

Home-Buying Applications Sink to 13-Year Low

Thusday, July 15, 2010

Demand for loans to purchase U.S. homes sunk to a 13-year low last week, and refinancing demand also slid despite near record-low mortgage rates, the Mortgage Bankers Association said on Wednesday.

Requests for loans to buy homes dropped 3.1 percent in the week ended July 9, after adjusting for the Independence Day holiday, to the lowest level since December 1996, the industry group said.

Refinancing applications fell 2.9 percent, and the mortgage market index that reflects total loan demand also fell 2.9 percent.

Average 30-year mortgage rates edged up 0.01 percentage point to 4.69 percent, but were near the record low of 4.61 percent set in March 2009, based on MBA records dating back to 1990.

Rock-bottom borrowing costs are helping borrowers with pristine credit to buy and those who still have equity in their homes to refinance.

But high unemployment and foreclosures remain major hurdles, and worries that prices could dip further are also keeping many potential buyers on the sidelines.

The April 30 expiration of homebuyer tax credits has also sapped summer purchasing activity. Buyers had raced to get in under the gun for the tax incentives this spring, and demand for loans to buy homes has fallen in nine out of the 10 weeks since the credit expired.

Refinancings accounted for 78.7 percent of all applications last week, the same as the prior week, the MBA said.

Talk has surfaced of a double-dip in U.S. housing, though most economists doubt a second leg down would be nearly as severe as the first.

"It's sort of a self-fulfilling prophecy, but if there's going to be a double-dip you might as well stay on the sidelines as opposed to coming in to buy," said Taylor Woods, president of Genpact Mortgage Services in Irvine, California, a unit of Genpact Limited (G.N).

"With as much turmoil as there is around loans that need to be modified, short sales, foreclosures -- all of those signs really indicate to buyers and investors that there will be better prices come tomorrow," he said.

Prices have toppled about 30 percent, on average, from their peaks four years ago, according to Standard & Poor's/Case-Shiller indexes. Most estimates are for additional single-digit declines.

"If there's one part of the economy that might suffer some sort of a double-dip it might come out of the housing market," said Cam Albright, economic research director and portfolio manager at Wilmington Trust Investment Management in Wilmington, Delaware.

Housing economists look for the autumn months to tell the story once the ripple effects of the expired tax incentives are in the past.

"There's been an awful lot of demand shifted forward by the first-time homebuyers credit," Albright said. "Once we get into the fall, maybe even sooner, some of that will begin to smooth out."

Source: Reuters

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Home Buyers Still Calling Shots on Price

Thursday, July, 15, 2010

Sellers cut prices on nearly one quarter of U.S. homes listed in June, an increase from May, showing buyers still call the shots in the U.S. housing market, real estate website Trulia.com said on Wednesday.

Sellers lowered asking prices at least once on 24 percent of homes listed as of July 1 compared with 22 percent the prior month, Trulia said in a report provided to Reuters before official release.

More job creation and employment security are needed for a sustained rebound, San Francisco-based Trulia said. Swelling inventory, under the weight of record foreclosures and typical summer selling, remains a formidable obstacle.

"We're seeing more and more sellers reduce their home listing prices to attract potential buyers, who definitely have the upper hand in negotiations this season," said Trulia Chief Executive Pete Flint.

Home buying demand came to a screeching halt after the April 30 deadline to sign contracts for up to $8,000 in tax credits.

Applications to purchase houses sank to 13-year lows, according to the Mortgage Bankers Association, as the spring race for tax credits stole from summer sales.

"The slow start to the summer season is creating major concern that we are heading toward a double-dip in the second half of this year" in the housing market, Flint said in a statement.

Sellers slashed a total of $27.3 billion in June from asking prices, more than $26.7 billion in May, $25 billion in April and $22.8 billion in March, according to Trulia. The average discount on reduced homes held at 10 percent from the original listing.

More than a year of the tax incentive helped put U.S. housing on solid footing. But the uninspiring jobs market keeps many potential buyers from making such a large commitment.

The unemployment rate fell in June to 9.5 percent, the lowest level in almost a year, but only because many jobless workers gave up on the search.

Sellers cut asking prices at least once by at least 30 percent on homes listed in 22 of the largest U.S. cities last month. That is more than double the 10 cities in May with such a high share of reduced prices.

Trulia said it expects prices will drop by up to 5 percent broadly, and by as much as 10 percent in areas hardest hit by high unemployment and foreclosures.

Prices have fallen about 30 percent on average from their peaks four years ago, according to the Standard & Poor's/Case-Shiller indexes.

Some markets, such as San Francisco, are seeing price appreciation. There are pockets of good news, but overall that is not the case for most of the country, Trulia said.

Minneapolis, Minnesota for the third straight month had the largest share of sellers cutting prices, with a rate of 40 percent. Growing inventory is forcing greater competition among sellers, according to Trulia.

Cities in the Western states where fewer sellers were lowering prices in much of the first half had a June setback.

Oakland, California, led the list, with 18 percent of sellers lowering home prices, a 38 percent surge in the month. Other cities that saw 20 to 25 percent spikes in the share of sellers cutting prices were San Diego, California; Omaha, Nebraska; Virginia Beach, Virginia; Honolulu, Hawaii; San Antonio and El Paso in Texas as well as Las Vegas.

Price-cutting on luxury homes listed at $2 million or more stayed elevated, with an average discount of 14 percent from the original listing price, Trulia said. Homes in this category account for less than 2 percent of total inventory, but almost one-quarter of total dollars slashed from all homes for sale.

Source: Reuters

Banks Repossess Homes at Record Pace

Thursday, July 15, 2010

Banks repossessed a record number of U.S. homes in the second quarter, but slowed new foreclosure notices to manage distressed properties on the market, real estate data company RealtyTrac said on Thursday.

The root problems of job losses and wage cuts persist, making a sustained U.S. housing recovery elusive.

Banks took control of 269,962 properties in the second quarter, up 5 percent from the prior quarter and a 38 percent spike from the second quarter of last year, RealtyTrac said in its midyear 2010 foreclosure report.

Repossessions will likely top 1 million this year.

"The underlying conditions haven't improved," RealtyTrac senior vice president Rick Sharga said in an interview.

The housing market still grapples with "unemployment, economic displacement in general, and still sits on over 5 million seriously delinquent loans that in all likelihood will at some point go into foreclosure," he said.

In 2005, the last "normal" year in housing, Sharga said, about 530,000 households got a foreclosure notice and banks took over a comparatively minuscule 100,000 houses.

This year more than 3 million households are likely to get at least one foreclosure filing, which includes notice of default, scheduled auction and repossession, Irvine, California-based RealtyTrac forecasts.

In the first half of the year, foreclosure filings were made on 1.65 million properties. That was down 5 percent from the last half of 2009 but up 8 percent from the first half of last year.

One in every 78 households got at least one foreclosure filing in the first six months of this year.

Source: Reuters

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Restoring AD & C Lending Key to Promoting Job and Economic Growth

Monday, July 12. 2010

With the Obama Administration and Federal Reserve this week sponsoring events that focus on how to ease regulatory burdens on the small business community that are constricting job growth, the National Association of Home Builders (NAHB) today urged policymakers to address the lack of financing for housing production that is impeding the housing and economic recovery.

"In normal times, housing accounts for about 17 percent of GDP," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "However, in the current economic climate, lenders have basically stopped making acquisition, development and construction (AD&C) loans and are calling in existing loans, even when the borrower's payments are current. Policymakers must act now to restore credit availability for viable home building projects; otherwise countless construction jobs will be lost, further jeopardizing the fragile economic recovery."

Federal Reserve Chairman Ben Bernanke said that the objective of a conference today at the Federal Reserve is to develop policies that will support the flow of loans to creditworthy small businesses. Meanwhile, the White House has asked business leaders and lawmakers to attend a jobs summit at the U.S. Chamber of Commerce on Wednesday to help identify regulatory obstacles that are hampering job and economic growth.

NAHB is reaching out to regulators, banks, Administration officials and members of Congress to seek action to reduce regulatory restrictions on AD&C credit and rein in overzealous bank examiners.

The vast majority of NAHB builder members are small businesses situated in communities across the nation who employ workers that contribute to the local economic base. NAHB estimates the one-year local impacts of building 100 single-family homes in a typical metro area result in the creation of 324 local jobs and an additional $21.1 million in local income and $2.2 million in taxes and other revenue for local governments.

Beyond its negative effect on home builders, the lack of AD&C lending has major implications for the economy and the nation, said Jones.

"Over the next decade, population growth will trigger demand for an average of at least 1.7 million additional homes per year," he said. "This translates into five million jobs and significant economic activity, including tax revenue. But without increased AD&C lending, this demand will not be met, jobs will be lost and job creation will suffer."

Source: NAHB

30-Year Mortgage Rate Drops to New Record Low

Thursday, July 8, 2010

U.S. 30-year mortgage rates dropped to a new record low in the past week, according to a survey released on Thursday by Freddie Mac (FMCC.OB), as concerns mounted about the economic recovery.

Attractive mortgage rates have raised demand for home refinancing loans in recent weeks. They have failed to increase appetite for mortgages to purchase a home, a trend that does not bode well for a housing market that still faces a huge imbalance between supply and demand.

Rates on 30-year fixed-rate mortgages, the most widely used loan, averaged 4.57 percent for the week ended July 8, down from the previous week's 4.58 percent and 5.20 percent a year earlier, according to the survey, which started in April 1971.

"With mortgage rates falling to historic lows, refinance activity has been strong over the past three months," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.

While low rates and high affordability have helped the housing market gain ground, it has struggled in recent months given stubbornly high unemployment and mounting foreclosures.

Home loan refinancing, however, puts more cash into consumers' hands to funnel into the U.S. economy and could help many homeowners avoid foreclosure.

Freddie Mac is the second-largest U.S. mortgage finance company.

Freddie Mac said the 15-year fixed-rate mortgage averaged 4.07 percent, up from 4.04 percent last week.
Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.

David Adamo, CEO of Luxury Mortgage in Stamford, Connecticut, said consumers are wary about making a home purchase despite low mortgage rates,

"Even with historically low interest rates and the affordability factor for housing at all time highs there seems to still be an air of caution for many would be buyers," he said.

"In addition, many homeowners have been discouraged from refinancing, particularly for jumbo loans," he said.

Source: Reuters

IMF says U.S. Recovering but Sees Unemployment, Housing Risks

Thursday, July 8, 2010

High unemployment and a moribund housing market are constraining the U.S. economic recovery, while the public debt looms large on the horizon and needs to be addressed, the International Monetary Fund said on Thursday.

The IMF raised its U.S. growth forecast slightly to 3.3 percent for 2010 and 2.9 percent for 2011, but said unemployment would remain above 9 percent for both years and inflation would remain low.

In a statement released after its annual consultations with U.S. government authorities, the IMF said recovery from recession had become well established due to a powerful fiscal and monetary policy response.

"The outlook has improved in tandem with recovery, but remaining household and financial balance sheet weaknesses -- along with elevated unemployment -- are likely to continue to restrain private spending," the fund said.

The IMF said the key challenge for the United States was to develop a credible fiscal strategy to ensure that public debt was seen to be put on a sustainable path without jeopardizing the recovery.

The fund forecast U.S. federal debt as a percentage of GDP would rise from 64 percent in 2010 to 72.4 percent by 2012 and 96.3 percent by 2020. It welcomed commitments by the Obama administration to stabilize this at just over 70 percent of gross domestic product by 2015 but called for a downward path after that, a step that would require both spending cuts and increased revenues.

It endorsed planned immediate measures to reduce the budget deficit, but said these should be designed to have the smallest impact on demand. It also said longer term measures were needed to address entitlement pressures, such as imbalances in the Social Security pension system.

It said the biggest contribution the United States could make to global growth and stability would be to increase its domestic savings -- particularly by reducing deficits -- and said the U.S. could no longer serve as the world's consumer. This would require domestic demand growth in exporting countries, the Fund said.

"With the U.S. dollar now moderately overvalued from a medium term perspective, this will need to be accompanied by greater exchange rate flexibility/appreciation elsewhere," the IMF added.

Source: Reuters

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ABC-Bradco Supply a Done Deal

Thursday, July 1, 2010

ABC Supply has finalized its purchase of Bradco Supply Co., adding 129 locations in 30 states to its company. This acquisition makes ABC Supply the LBM industry’s largest pro dealer by sales, with annual revenues of more than $4 billion and 479 locations in 44 states and the District of Columbia.

Both ABC Supply, based in Beloit, Wis., and Bradco, headquartered in Avenel, N.J., are distributors of roofing, siding, windows and other exterior building products.

“We are working hard to ensure a smooth transition for our associates and customers alike,” said David Luck, ABC Supply’s president and CEO. “We are looking forward to sharing ABC Supply’s residential strength with Bradco and having Bradco share its commercial strength with ABC Supply.  We believe that the combined company gives us a more balanced product and service offering for our customers.”

Source: Home Channel News

Mortgage Rates Drop to Another Low, 4.58 PCT.

Thursday July 1, 2010

Mortgage rates have sunk to the lowest level in more than five decades, but consumers aren't rushing to refinance their loans or buy homes.

Mortgage company Freddie Mac said Thursday the average rate for 30-year fixed loans sank to 4.58 percent this week.

That's down from the previous record of 4.69 percent set last week and the lowest since the mortgage company began keeping records in 1971. The last time they were cheaper was the 1950s, when most long-term home loans lasted just 20 or 25 years.

Rates have fallen over the past two months. Investors wary of the European debt crisis and the stock market have shifted money into the safety of Treasury bonds, driving down yields. Mortgage rates tend to track the yields on long-term Treasurys.

On Wednesday, the yield on the benchmark 10-year Treasury note dropped to 2.95 percent. That was the first time it has fallen below 3 percent since April 2009, when the markets were beginning to recover from the financial crisis.

But tighter lending standards and declining home equity have made it difficult for many borrowers to refinance. Many who do qualify have already done so over the past 18 months.

Applications for mortgages rose nearly 9 percent last week from a week earlier, the Mortgage Bankers Association said Wednesday. But they remain at only about half the level of early 2009 and a far cry from the refinancing boom of 2003 through 2005, when home prices were soaring and borrowers were able to pull equity out of their homes to pay for home renovations, boats and vacation homes.

Many Americans owe more on their mortgages than their homes are worth and can't refinance through the usual channels. The Obama administration has launched programs to help borrowers refinance if they owe up to 25 percent more than their home's value and have their loans guaranteed by mortgage giants Freddie Mac or Fannie Mae.

About 291,000 homeowners have participated as of March -- a small fraction of the estimated 15 million homeowners who are "underwater" on their mortgages.

"I expect to see pockets of re-fi activity versus an overall wave," said Scott Buchta, chief mortgage strategist with Braver Stern Securities. "The problem is, for many borrowers, they don't have the equity in their homes."

If rates drop below 4.5 percent, Buchta said, that might spark a burst of refinancing activity. But it would be limited to people who refinanced or bought homes over the past year and have rates of 5 percent or higher.

Source:  Associated Press

Pending Home Sales 'Fell Off a Cliff'

Thursday, July 1, 2010

The experts expected home sales to drop once the homebuyer tax credit lapsed at the end of April, but the depth of the decrease was shocking.

According to the National Association of Realtors (NAR), pending home sales fell a whopping 30% in May. Their index, which measures signed sales contracts but not closed sales, plunged to 77.6 from 110.9 in April. It's even off 15.9% from a year ago when the nation was barely emerging from the recession.

"The pending home sales report is a disaster," said Mike Larson, a real estate analyst for Weiss Research. "Sales fell off a cliff after the tax credit expired. It's the biggest monthly decline ever and the index is at its lowest level since NAR began tracking it in 2001."

Lawrence Yun, NAR's chief economist downplayed the damage a bit. According to him, customers rushed into deals to claim the credit, borrowing from May sales. Once the economic recovery comes into full swing, housing markets will heat up.

"If jobs come back as expected, the pace of home sales should pick up later this year," said Yun, "and reach a sustainable level of activity given very favorable affordability conditions."

Those conditions include much lower home prices and extremely favorable mortgage interest rates. The question is when -- or if -- the job market will ever bounce back.

"We're not creating jobs," said Larson. "The housing problems now are being driven by broad economic problems." 

Source: CNNMoney.com

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Home Refinancing up But Buying Demand Near 13-Year Low

Wednesday June 30, 2010

Refinancing drove total U.S. mortgage applications to an eight-month peak, as loan rates fell to or near record lows, but demand to buy homes sank toward 13-year lows last week, the Mortgage Bankers Association said on Wednesday.

The U.S. housing market continued to deflate after a spring sales spree, fueled by now-expired federal tax credits of up to $8,000, robbed from summer home buying.

The upside is now limited by unemployment stuck near 10 percent, heavy foreclosure supply and pent-up selling from owners just waiting for the right time to put their homes back on the market.

Mortgage refinancing requests jumped 12.6 percent in the week ended June 25 to the highest level since May 2009, as average 30-year mortgage rates slid 0.08 percentage point to 4.67 percent, the industry group said.
The 30-year loan rate flirted with the record low of 4.61 percent set in March 2009, according to the MBA's records dating back to 1990, while the 4.06 percent 15-year rate was an all-time lows.

Refinancing drove total mortgage applications up by 8.8 percent, seasonally adjusted, last week. Nearly 77 percent of all loan requests were for a refinancing, the highest share since April 2009.

Still, refi applications were about half the level seen in the spring of 2009 and purchase demand fell for the seventh week out of eight weeks since the tax credit ended, said Michael Fratantoni, MBA's vice president of research and economics.

Many qualified borrowers who could refinance have already taken advantage of low rates when they previously touched current levels. Others are not eligible, either because of credit scores or home values that are well below their current mortgage amounts.

Despite low borrowing costs and home prices average about 30 percent less than their peaks four years ago, applications to buy homes dropped 3.3 percent to hover just above 13-year lows.

Buyers had to sign contracts by April 30 to get the $8,000 first-time purchase credit or $6,500 move-up credit.

Sales of new homes plunged nearly 33 percent in May, however, to the lowest since record keeping began in the early 1960s and existing home sales unexpectedly fell 2.2 percent. A double-dip recession is a growing concern.

"We're not out of the woods yet," said James Angel, associate finance professor at Georgetown University's McDonough School of Business in Washington. "Rescue scheme after rescue scheme after rescue scheme has been tried, but we still have millions of homeowners facing foreclosure."

Home prices rose in April, but heavy unsold inventory of houses and foreclosure activity will impede a sustained recovery, Standard & Poor's said on Tuesday.

"Prices will stay more or less stagnant as excess inventory is worked off for several years," said Angel.

Source: Reuters

House Approves Homebuyer Tax Credit Extension

Wednesday, June 30, 2010

The House of Representatives voted Tuesday to give first-time homebuyers three more months to close on their purchases and land an $8,000 federal income tax credit.

But the Senate had better act fast - the deadline is currently Wednesday.

The bill doesn't help anyone currently shopping for a home. Buyers must have signed a contract by April 30 to qualify for the tax break. At issue is when the deal must be finalized.

The House voted 409 to 5 to delay the closing deadline to Sept. 30 in a stand-alone measure. The move comes nearly a week after the Senate failed to advance a much larger jobs bill that contained the tax credit provision.

The smaller House bill would raise the deficit by $9 million over a decade.

An estimated 200,000 people may miss out on the tax credit because they won't be able to close by close of business Wednesday. Many are trying to take advantage of short sales, which are complicated deals to complete.

The measure also seeks to reduce fraud associated with the credit. Some 1,300 prison inmates are thought to have claimed and received more than $9 million in tax credits, according to a Treasury Inspector General for Tax Administration report released earlier this month. The bill would allow the Internal Revenue Service to disclose tax return information to prison administrators.

Senate Democrats introduced a similar bill Tuesday, with Majority Leader Sen. Harry Reid, D-Nev., saying the measure "should be passed swiftly."

In a related move, the House failed to pass a measure extending the deadline to file for unemployment benefits until Nov. 30. More than 1 million people are estimated to have exhausted this lifeline since the deadline expired earlier this month. The provision, which would raise the deficit by $34 billion, was also included in the Senate bill that failed to advance last Thursday.

The House is expected to take up the legislation again on Wednesday. The Senate bill introduced Tuesday evening would also extend benefits through November. 

Source: CNNMoney.com

Foreclosures Sell at 30% Discount

Wednesday, June 30, 2010

Foreclosures accounted for a third of all sales -- and sold at a nearly 30% discount -- during the first three months of 2010.

According to a new report from RealtyTrac, the marketer of foreclosed properties, 31% of all sales were foreclosures. And homebuyers purchasing those properties paid a whopping 27% less, on average, compared to sales of non-distressed homes.

These foreclosure sales include properties sold in short sales or after a bank repossession, known as REOs in industry terms. It does not include transfers from borrowers to banks, as in a sheriff's auction.

REOs, those homes already taken back from borrowers, commanded lower prices than short sales and other pre-foreclosures. The average REO sold for 34% less than conventional sales while pre-foreclosures averaged only 15% less.

Part of the reason for the bigger price cut for REOs is that many of them come to the market in poor condition, their previous owners either unable to or unwilling to maintain them.

Source: CNNMoney.com

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Home Prices Up 3.8% in April - But Don't Celebrate

Tuesday, June 29, 2010

Home prices rose 0.8% in April compared with March and were up 3.8% from a year ago, according to the S&P/Case-Shiller Home Price Index of 20 major housing markets
.
That good news is tempered by a couple of factors. First, the one-year comparison was against a low-ebb mark. In April 2009, prices were just above a five-year low. Overall, prices are off 30% from their peak
Secondly, the improvement came during a time when the federal government was heavily subsidizing home sales through an $8,000 homebuyer's tax credit. That credit is about to expire.

"Other housing data confirm the large impact, and likely near-future pullback, of the federal program," said David Blitzer, a spokesman for Standard and Poor's.

Once the tax credit fully expires, home prices are likely to take a beating, according to Pat Newport, a housing market analyst for IHS Global Insight.

"The housing glut and foreclosures will drive the national Case-Shiller index down another 6% to 8%, with prices bottoming in 2011," he said.

The strongest rebound has been in California, where S&P tracks three major markets. San Francisco prices jumped 2.2% month-over-month and are up 18% year-over-year, more than any other city in the 20-city index.

San Diego prices rose 0.7% compared with March and 11.7% since April 2009. Los Angeles prices rose 7.8% over the past 12 months, and 0.7% in April.

The biggest loser over the past 12 months has been Las Vegas, down 8.5%. Prices rose there 0.3% there month-over-month.

Source: CNNMoney.com

Housing Cheapest in 40 Years, But Renting Still Beats Buying

Tuesday, June 29, 2010

Northern Trust economist Paul Kasriel raised some eyebrows after declaring in a recent report that "housing is about as an attractive a purchase as it has been in the past 40 years."

Kasriel, who is no Pollyanna, based his analysis on a combination of "rock-bottom" mortgage rates, house prices relative to household incomes, and a classic comparison of ‘buying vs. renting'.

There's no debating housing affordability has improved dramatically as mortgage rates have fallen and home prices tumbled from the 2006 highs. But Dan Alpert, managing director of Westwood Capital, says would-be buyers need not worry about the market ‘running away' from them, as many Americans feared earlier this decade.

"The affordability is pretty much here to stay," Alpert says. "I think we're going to be in an era of very flat pricing and very, very cheap money for a very long time."

If it's not clear, that's not a ‘good news' outlook, he says: "In a deflationary environment, you have to scratch your head twice and say, ‘Gee, do I really want to be owning rather-than renting?'"

Overall, Alpert predicts national home prices to fall another 5% to 8% from the lows of May 2009 but expects real estate trends to become much more regional, i.e. return to more historic norms.

On that front, he sees more risks in areas that fared best during the downturn, like the New York metropolitan area. In the so-called Sand States, where housing prices fell 45-55%, "housing has reached the point where, relative to rentals, occupancy costs are about the same," he says. "That's not the case here in NY and elsewhere on the East Coast."

Source: Yahoo Finance

Mortgage Rates Sink to Lowest Level on Record

Thursday, June 24, 2010

Mortgage rates fell this week to the lowest level on record, giving consumers added incentive to lock in low payments on home purchases and refinancings.

Mortgage company Freddie Mac said Thursday that the average rate for 30-year fixed loans sank to 4.69 percent, from 4.75 percent last week.

That's the lowest since Freddie Mac began tracking rates in 1971. The previous record of 4.71 percent was set in December. Rates for 15-year and five-year mortgages also hit lows.

Mortgage rates have fallen over the past two months. Investors wary of the European debt crisis and the turbulent stock market have shifted money into the safety of Treasury bonds, driving down yields. Mortgage rates tend to track the yields on long-term Treasury debt.

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.

Rates on 15-year, fixed-rate mortgages fell to an average of 4.13 percent, the lowest on records dating to September 1991 and down from 4.2 percent a week earlier.

Rates on five-year, adjustable-rate mortgages averaged 3.84 percent, down from 3.89 percent a week earlier. That was also the lowest on Freddie Mac's records, which only date back to January 2005.

Average rates on one-year, adjustable-rate mortgages fell to 3.77 percent from 3.82 percent. That was the lowest average since May 2004.

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 a point for 30-year, 5-year and 1-year loans. The average fee for 15-year loans was 0.6 of a point.

Source: Associated Press

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New Home Sales Plummet to Record Low

Wednesday, June 23, 2010

New home sales plummeted to a record low in May, the first month following the expiration of the homebuyer tax credit. This snapped a two-month streak of gains.

New home sales declined 32.7% to a seasonally adjusted annual rate of 300,000 last month, down from an downwardly revised 446,000 in April, the Commerce Department reported Wednesday. Sales year-over-year fell 18.3%.

This is the slowest sales pace since the Commerce Department began tracking data in 1963. The prior record was set in September 1981, when new homes sold at an annual rate of 338,000.

" We expected a slowdown, but the extent of this decline was a surprise," said Anika Khan, an economist at Wells Fargo. The figure was even worse than her relatively pessimistic forecast of an annual rate of 380,000 in May.

A consensus of economists surveyed by Briefing.com had expected May sales to slide to an annual rate of 430,000.

" Clearly, the lack of a tax credit had a lot to do with it, and it's going to be a bit of a bumpy road ahead as we get a few more months of payback," Khan said.

Home sales had surged in March and April as homebuyers scrambled to sign contracts ahead of the April 30 deadline for the tax credit. First-time homebuyers qualified for a tax credit up to $8,000, while repeat buyers could get as much as a $6,500 break.

Homebuyers have until June 30 to close deals, but the Senate may vote to push that deadline back to Sept. 30.

Khan expects home sales to remain depressed through the third quarter as home construction continues to contract and lending standards remain tight. But, she said, sales should pick up slightly in the fourth quarter.

Although, she added, we are still years away from a normal level of new home sales -- an annual rate between 800,000 and 900,000.

" A full housing recovery is contingent on employment," Khan said. "When we see the unemployment rate abate, and some growth in salaries and incomes, we'll get some sustainable momentum in the housing market."

A real estate industry report released earlier this week showed that existing home sales, based closed sales rather than signed contracts, slipped slightly last month but remained elevated.

Source: CNNMoney.com

Home Sales Dip 2.2 PCT Despite Tax Credits

Tuesday, June 22, 2010

Sales of previously occupied homes dipped 2.2 percent in May, signaling that a boost from home-buying tax credits is fading sooner than expected.

Last month's sales fell from the previous month to a seasonally adjusted annual rate of 5.66 million, the National Association of Realtors said Tuesday. Analysts who had expected sales to rise expressed concern that the real estate market could tumble once the benefit of the federal incentives is gone entirely, starting next month.

Sales have climbed 25 percent from the 4.5 million annual rate hit in January 2009 -- the lowest level of the recession. But they're still down 22 percent from the peak rate of 7.25 million in September 2005.

The report counts home sales when a deal closes. So federal tax credits of up to $8,000 for home buyers likely influenced May's results. The deadline to get a signed sales contract and still qualify was April 30. Buyers must close their purchases by the end of this month.

The tax credits were expected to lift sales in May and June. Lawrence Yun, the Realtors chief economist, said delays in the mortgage-lending process and put about 180,000 potential buyers in limbo. He's unsure if they will qualify by the June 30 deadline. The trade group is pushing Congress to extend the deadline for closing a sale until Sept. 30.

The report is "a worrisome sign for what will occur in July and thereafter when the effect of the tax credit is behind us," said Joshua Shapiro, chief U.S. economist at MFR Inc., an economic consulting firm in New York.

The drop in May sales was led by a more than 18 percent decline in the Northeast. Sales were unchanged in the Midwest, but rose nearly 5 percent in the West and 0.5 percent in the South.

The inventory of unsold homes on the market dropped 3.4 percent to 3.9 million. That's an 8.3 month supply at the current sales pace, compared with a healthy level of about six months. The median sales price in May was $179,600, up 2.7 percent from a year earlier.

Foreclosures and short sales -- in which the lender agrees to accept less than the total mortgage -- made up 31 percent of sales in May. First-time buyers made up 46 percent.

The report "suggests that even government stimulus in the form of a tax credit isn't enough," to support the U.S. housing market, wrote Guy LeBas, an analyst with Janney Montgomery Scott.

Source: Associated Press

Fed Rate Hikes Slowed by Moderate Recovery

Wednesday, June 16, 2010

High unemployment, tame inflation and moderate economic growth will likely mean the U.S. Federal Reserve will hold off until next year to raise official interest rates to 0.5 percent, a Reuters poll showed.

Fears that contagion from euro zone debt problems might again push the world into a crisis akin to that seen in 2008 also came into play in the forecasts the U.S. central bank.

The survey of over 90 economists, taken in the past week, suggests the U.S. central bank will maintain interest rates at the current ultra-low level near zero for some time and then hike to 0.5 percent in the first three months of 2011.

A similar survey in May suggested economists were looking for a Fed rate increase to 0.5 percent in the fourth quarter of this year.

" When unemployment is unusually high, a central bank has good reason to leave rates as low as possible as long as possible to optimize growth before inflation starts to rise," said Chris Low, chief economist at FTN Financial.

Inflation is not expected to rise any time soon, according to the survey.

The core consumer price index, which does not include food or energy prices, should rise by 0.9 percent in the second and third quarters of this year and then ease to 0.8 percent in the fourth quarter, according to the median of forecasts from the poll.

Expectations for core CPI this year vary widely from 0.8 percent to 1.7 percent, with the median at 1 percent. Core CPI for 2011 is forecast at 1.4 percent.

Headline inflation will likely ease from 2 percent in the second quarter of this year to 1.2 percent in the fourth quarter, with expectations pegged at 1.8 percent for all of 2010 and the same in 2011.
Economists will likely fine-tune their inflation outlook on Thursday when the U.S. government releases CPI data for May.

Source: Reuter

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New Home Construction Sinks 10%

Wednesday, June 16, 2010

The government reported Wednesday that new home construction fell sharply in May -- the first month after a homebuyer tax credit expired.

Housing starts fell 10% from April to a seasonally-adjusted annual rate of 593,000 last month, the Commerce Department said.

Economists were expecting housing starts to fall to only 655,000. On a year-over-year basis, starts rose 7.8% from May 2009.

New construction of single-family homes, the key sector of the housing market, plummeted 17.2% over the month to an annual rate of 468,000.

The annual rate for new construction of multi-family homes -- buildings with 5 or more units -- was 112,000.

April was the last month in which first-time home buyers could qualify for a federal tax credit of up to $8,000. Earlier this year lawmakers extended the deadline through April 30 and added a new credit of up to $6,500 for some existing home owners who move.

Forecasts were too optimistic given the tax credit's expiration, said Ian Shepherdson, economist at High Frequency Economics, in a research note.

" The tax credit pulled housing transactions and construction activity forward into the spring from the summer," Shepherdson said, "so the next few months will see activity remaining at a very low level."

Housing starts will probably drop "a bit further" in June, Shepherdson added, though he expects activity "to begin reviving, gradually, in the fall."

Source: CNNMoney.com

Housing Starts, Permits Decline in May

Wednesday, June 16, 2010

Nationwide housing starts and issuance of building permits stalled in May following the expiration of a popular home buyer tax credit program, according to data released by the U.S. Commerce Department today. New-home production declined 10 percent to a seasonally adjusted annual rate of 593,000 units, the slowest pace since December 2009, while permit issuance slowed 5.9 percent to a rate of 574,000 units, its slowest pace since May 2009.

"Not surprisingly, builders tapped the breaks on new-home production and pulled fewer permits for new homes in May in response to an expected lull in buyer demand following expiration of the tax credits at the end of April," noted Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich.

"Today's numbers show an anticipated pull-back on single-family building following the tax credit deadline," acknowledged NAHB Chief Economist David Crowe. "No doubt, a certain amount of building and buying activity that would have taken place in May was pulled forward to accommodate the program's end date, which is why we have projected some softening of the numbers in the second quarter. That said, in the coming months, an improving economy, rising employment, low mortgage rates and stabilizing home values should play their part to keep the housing market moving forward." Crowe noted, however, that the ongoing difficulties builders are having in obtaining financing for viable new projects and accurate appraisals of new homes are complicating factors that are slowing the industry's recovery.

The decline in housing starts in May was entirely on the single-family side, where the government's tax credits for first-time and repeat buyers had the greatest impact in the previous months. In that segment, starts fell 17.2 percent to a seasonally adjusted annual rate of 468,000 units, their slowest pace since May of 2009. Meanwhile, multifamily starts, which can be more erratic on a monthly basis, showed a dramatic 33 percent gain in May to a rate of 125,000 units.

Permit issuance, which can be an indicator of future building activity, fell 9.9 percent on the single-family side to a rate of 438,000 units in May, which was also the slowest pace since May 2009. Multifamily permit issuance rose 9.7 percent to 136,000 units in May.

Regionally, housing starts were mixed in May, with the Northeast posting a 6.3 percent decline, the Midwest a 4.9 percent increase, the South a 21.3 percent decline, and the West a 10.8 percent increase. Permits fell in every region, with a 1.5 percent decline in the Northeast, a 9.6 percent decline in the Midwest, a 5.2 percent decline in the South and a 6.8 percent decline in the West.

Source: NAHB

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Builder Confidence Declines in June

Tuesday, June 15, 2010

Snapping a string of two consecutive monthly gains, builder confidence in the market for newly built, single-family homes fell back to February levels, before the beginning of the home buyer tax credit-related surge, according to results of the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI dropped five points to 17 in June.

"The home buyer tax credit did its job in stoking spring sales and we expected a temporary pull back in the builders' outlook after the credit expired at the end of April," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "However, the reduction in consumer activity may have been more dramatic than some builders had anticipated, which resulted in their lower confidence levels."

"We expected some softening in the market following the expiration of the home buyer tax credit and this report seems to verify this assumption," said NAHB Chief Economist David Crowe. "In the coming months, an improving economy, rising employment, low mortgage rates and stabilizing home values should help the housing market move forward. But as today's HMI data shows, builders still remain very cautious and are aware that several factors could impede the nascent housing recovery, including serious problems in obtaining financing for the production of housing, faulty appraisal practices and competition from short sales and foreclosed properties."

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 conditions as good than poor.

Source: NAHB

Home Size Continues to Decline; Buyers Increasingly Opt for Single-Story Homes

Monday, June 14, 2010

The size of new single-family homes completed declined last year, dropping to a nationwide average of 2,438 square feet, according to detailed information about the characteristics of new homes completed (http://www.census.gov/const/www/charindex.html) in 2009 that was released recently by the Census Bureau.

After increasing continually for nearly three decades, the average size of single-family homes completed in the United States peaked at 2,521 square feet in 2007. It was essentially flat in 2008, then dropped in 2009, so that new single-family homes were almost 100 square feet smaller in 2009 than in 2007.

"We also saw a decline in the size of new homes when the economy lapsed into recession in the early 1980s," said NAHB Chief Economist David Crowe. "The decline of the early 1980s turned out to be temporary, but this time the decline is related to phenomena such as an increased share of first-time home buyers, a desire to keep energy costs down, smaller amounts of equity in existing homes to roll into the next home, tighter credit standards and less focus on the investment component of buying a home. Many of these tendencies are likely to persist and continue affecting the new home market for an extended period."

Crowe also pointed out that the average square footage of new single-family homes completed is only one measure of new home size. "The Census Bureau also reports average square footage in a quarterly release based on starts rather than completions, which is sometimes useful when market conditions are changing rapidly," he said.

In keeping with their slightly smaller size, new single-family homes completed in 2009 had fewer bedrooms than previously. After increasing for almost 20 years, the proportion of single-family homes with four bedrooms or more topped out at 39 percent in 2005; it was 34 percent last year. The proportion of single-family homes with three bedrooms increased from 49 percent to 53 percent between 2005 and 2009.

New single-family homes completed last year also had fewer bathrooms than previously. The proportion of homes with three or more bathrooms was 24 percent last year, a decline from the peak of 28 percent in both 2007 and 2008. The percentage of single-family homes with two bathrooms increased from 35 to 37 last year, and the percentage with 2½ bathrooms was at 31 percent for the third consecutive year. The proportion of single-family homes with 1 or 1½ bathrooms has been below 10 percent for more than a decade.

Source: NAHB

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At PCBC, a Display of Builder Confidence

Thursday, June 10. 2010

Nearly 40% of West Coast builders, interviewed just before they left for the PCBC show here at the Moscone Center, reported that their company’s business has improved in the last few months. This statistic, one of several positive findings to come from an online survey sponsored by the Pacific Coast Builders Conference, provided the right opening note for the three-day conference, which began June 9.

Jonathan Wierengo, director of marketing for the Tapco Group, sat out the 2009 show because of budgetary constraints but returned this year. “We’ve seen an uptick in business,” Wierengo told Home Channel News. “The market feels like it’s coming back.”

The Detroit-based company focused on some new introductions, including a cedar shake composite roofing tile that will begin shipping in July. Another new offering is factory-mixed color blends of composite tiles such as green/grey/plum or brown/cedar/sand. “We’ve put together pre-packaged bundles for the contractors,” Wierengo explained.

Although the PCBC show footprint has shrunk considerably from years past, a core group of builders, architects and manufacturers attend annually, and many of them never miss the PASS brunch, a major networking event sponsored by the Building Industry Association (BIA) Bay Area. Attendance was up this year, with 350 people at the June 9 brunch including representatives from 19 building companies, including KB Home, Shea Homes, Meritage Corp., DR Horton, Pulte, Ponderosa Homes, William Lyon Homes and Brookfield Homes.

Two representatives from the purchasing department of De Nova Homes gave several reasons for coming to the brunch besides networking with their usual trading partners. “With the economy the way it is, you have to replace lost [suppliers],” said Debbie Evans, singling out drywall and windows as problematic categories earlier this year.

Colleague Steph Peek agreed. “Shower doors were a tough one for a while, too,” she said. Peek added: “As a purchasing agent, I like to talk one on one with people who have the information I need right here.”

Besides walking the convention center floor to see new products and talk to vendors, PCBC participants could attend a number of educational sessions, economic forecasts and inspirational talks. The keynote luncheon speaker on June 9 was Michael Lewis, author of "Liar’s Poker" and "The Blind Side." Housing analyst Ivy Zelman interviewed Lewis on his latest book, "The Big Short," which examines the subprime mortgage meltdown and the credit crisis.

Asked if the United States has learned any lessons from the financial fiasco on Wall Street, Lewis said he thought that Capitol Hill “is still out of touch” with the general public’s anger over the government bailout of banks and is offering only “watered down reforms” of financial institutions.

Source: Home Channel News

Freddie Mac: Mortgage Rates Hit Low For Year

Thursday June 10, 2010

Rates on 30-year fixed mortgages fell this week to the lowest level of the year and were barely shy of the all-time low.

Mortgage finance company Freddie Mac says the average rate sank to 4.72 percent, down from 4.79 percent last week. It was just above the record of 4.71 set last December.

The average rate on a 15-year fixed-rate mortgage hit 4.17 percent, down from 4.2 percent last week and the lowest on records dating back to August 1991.

Though mortgage rates are at attractive levels, the housing market hasn't benefited. The number of customers applying for a mortgage to purchase a property fell to the lowest level in 13 years last week and was down 35 percent from a month ago, according to the Mortgage Bankers Association.

That's a sign the market is struggling without a tax credit of up to $8,000 for first-time buyers, which expired at the end of April.

The government has taken massive steps to help the housing market recover. A campaign by the Federal Reserve to reduce borrowing costs for consumers pushed rates down to extraordinarily low levels last year. Rates were expected to rise after the program ended this spring, but have fallen instead over the past two months.

Source: Associated Press

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Multifamily Builders Less Pessimistic

Thursday, June 10, 2010

The multifamily market showed signs of moving back toward stability in the first quarter of 2010, according to the latest NAHB's Multifamily Market Index (MMI). The current production index for market-rent apartments jumped to 30.6, 14 points higher than a year earlier, while future demand expectations for Class A apartments rose to 49.6 from 34 and for Class B to 53.1 from 43.9. For lower-rent units and for-sale condominiums, the current production indexes rose to 38.2 and 25.0, respectively, more than 10 points higher than in the first quarter of 2009.

The MMI measures multifamily builder sentiment based on production and occupancy at the current time--using a scale of stronger, the same, or weaker compared to the previous quarter--as well as builders' expectations for conditions over the next six months. An index number greater than 50 indicates that the number of builders who view conditions as getting stronger outnumber the number who view conditions as becoming weaker. The values are not seasonally adjusted.

The current demand index for Class A apartments - among the hardest hit by the recession- also showed improvement, rising to 41.7, or 19 points higher than a year earlier. The index measuring demand for Class B apartments rose to 43.4, up seven points. Demand for Class C apartments - the least expensive, and the most likely to stay occupied during hard times - actually showed a slight decline, falling about two points to 43.1.

Builders' expectations for future production, though improved from a year ago, are still constrained by the difficulty in obtaining loans to fund development. Condo starts showed the lowest expectation for increased starts, at 32.7. The future production index for lower-rent communities is 45.1 and for market-rate rent communities 43.5.

"The most encouraging part of the MMI is the number of multifamily builders who are expecting gains in rental occupancy over the next six months," according to NAHB Chief Economist David Crowe. "Builders' optimism is directly related to recent positive employment news and expectations for the trend to continue. Current conditions are still depressed by multifamily builders' difficulty obtaining financing for acquisition, development and construction (AD&C)," said Crowe.

Source: NAHB

Bernanke Says Recovery on Track, Restraints Remain

Wednesday, June 9, 2010

Federal Reserve Chairman Ben Bernanke said on Wednesday the U.S. economic recovery was on solid footing but cautioned it could be years before the jobs lost during the deep recession are restored.

" Although the support to economic growth from fiscal policy is likely to diminish in the coming year, the incoming data suggest that gains in private final demand will sustain the demand in economic recovery," Bernanke said in testimony to the House of Representatives Budget Committee.

However, he said the recovery will likely be held back by a slow pickup in employment and weak housing and commercial property markets.

Bernanke noted that the U.S. central bank expects growth of 3-1/2 percent this year and a slightly faster expansion in 2011, but he said at that pace, unemployment would decline only slowly.

" In this environment, inflation is likely to remain subdued," Bernanke said, adding that long-run inflation expectations were stable.

Financial markets largely ignored the comments, which were similar to remarks Bernanke made on Monday night.

Labor markets have shown modest improvements recently in employment, hours worked, and income, and hiring prospects have improved, he said. But it will take "a significant amount of time" before employers restore the roughly 8-1/2 million jobs lost during the downturn, he added.

He said the Fed is keeping a close watch on the European debt crisis for any possible impact on the U.S. economy. Actions taken by European leaders emphasize a firm commitment to calming strains and restoring stability, he said.

" If markets continue to stabilize, then the effects of the crisis on economic growth in the United States seem likely to be modest," he said.

Source: Reuters

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More Employees Jump Ship as Economy Improves

Wednesday June 9, 2010

One sign of better economic times is when more people start finding jobs. Another is when they feel confident enough to quit them.

More people quit their jobs in the past three months than were laid off -- a sharp reversal after 15 straight months in which layoffs exceeded voluntary departures. The trend suggests the job market is finally thawing.

Some of the quitters are leaving for new jobs. Others have no firm offers. But their newfound confidence about landing work is itself evidence of more hiring and a strengthening economy.

" There is a century's worth of evidence that bears out this view that quits rise and layoffs fall as the job market improves," said Steven Davis, an economist at the University of Chicago.

Still, the number of people quitting their jobs is nowhere near what it was before the recession. Economists expect the improvement in the job market to be fitful, rather than consistent. In May, for example, private employers added only 41,000 net jobs after adding 218,000 in April.

Yet the long-term trend points to an improving job market. The economy has created a net 982,000 jobs this year after a recession that wiped out more than 8 million of them.

The government said Tuesday that the number of people quitting rose in April to nearly 2 million. That was the most in more than a year and an increase of nearly 12 percent since January. That compares with 1.75 million people who were laid off in April, the fewest since January 2007, before the recession began.

During the depths of the recession, workers were hesitant to quit -- and not only because jobs were scarce. Even if they found a new job, some feared that accepting it would leave them vulnerable to a layoff. At many companies, layoffs follow a simple formula: Last hired, first fired.

Many clung to their jobs out of fear, said David Adams, vice president of training at Adecco, a national staffing agency. When Adecco tried to recruit workers to fill open positions, it frequently ran into the same obstacle: Few workers felt like betting on a new job that might soon disappear.

Not so much any more. Adecco is seeing more employed workers seeking interviews, rather than laid off workers searching for a lifeline.

" The hangover is kind of over," Adams said. "It's really starting to move toward a market where the employee can have a lot more confidence making a move."

Source: Associated Press

Double Dip Recession: What Are The Odds?

Wednesday June 9, 2010

Europe's debt crisis. Companies still not hiring. The Gulf oil spill. These are uncertain times to say the least. But while you might think economists would be running for the hills and looking ahead to a so-called "double dip recession," that's not necessarily the case.

In fact, some economists think a double dip is even less likely than it was earlier this year.

David Wyss, chief economist with Standard & Poor's, said that even though he thinks slower U.S. growth is practically a sure thing, the odds of a double-dip actually have shrunk to 20%, from 25% earlier this year.

Same goes for Derek Hoffman, founder and editor of The Wall Street Cheat Sheet, who also puts the odds of a double dip at 20%, when just a few months earlier he saw them at 50-50.

The term "double dip" refers to a recession followed by a short-lived recovery that then slides back into a second recession. It can be measured by fluctuations in gross domestic product, or GDP -- one of the broadest measures of economic activity.

Hoffman said he changed his mind about a potential double dip after major U.S. companies reported solid profit growth in the first quarter of 2010 and European leaders approved a $1 trillion bailout package to deal with the region's debt crisis.

Granted, the picture isn't all rosy. Unemployment is still high at 9.7%. But Wyss points out that consumers are spending again. Plus, the average person on main street doesn't seem as worried about getting laid off as they were a year ago, he said.

Wyss's comments echo those of Federal Reserve chairman Ben Bernanke, who on Monday told reporters that he expects a continued economic recovery, in part because of revived consumer spending. Bernanke also said the recovery would be slow -- it "won't feel terrific," he said.

Bernanke dodged a question about whether he fears a double-dip recession, saying "nobody knows with any certainty."

To be sure, any chance of a double dip is nothing to shrug off.

Mark Vitner, a senior economist at Wells Fargo Securities, likes to call himself an optimist, but said he can't deny that when he talks to clients, he's blunt about the risk of a double dip. He calculates the chances of one happening at about 30%, whereas a few months ago, he would have said it was as low as 15%.

" We experienced the worst crisis in a generation and now there are major problems in Europe and with the oil spill. How optimistic can you expect an optimist to be?" he said.

The winding down of government stimulus programs and inventory rebuilding, which together accounted for much of the recovery, are the major factors behind a slowdown, Vitner said.

Add in geopolitical unrest and volatile global markets, and businesses, consumers and lawmakers alike will be more hesitant to make investments that could support economic growth.

" One of the things to remember is conditions do not have to be perfect for the economy to grow," Vitner said. "But there's a limit to how much bad news this economy can take."

In the case of the Great Recession, the U.S. economy shrunk by 6.3%, the sharpest decline in 26 years. A year later, that negative number turned positive: GDP in the fourth quarter of 2009 showed 5.6% growth -- the best in 6 years.

For a double dip to technically occur, GDP would have to once again turn negative.
Overall, economists are predicting that the U.S. recovery will slow to around 3% growth this year. Nevertheless, growth is growth.

Source: CNN Money

Interest Rates to Stay Low for Some Time": Fed's Evans

Tuesday, June 8, 2010

Low inflation and high unemployment in the United States justify the Federal Reserve keeping benchmark interest rates ultra-low for "quite some time", Chicago Fed President Charles Evans said on Tuesday.

" We have a little bit more risk with the European situation; the (U.S.) outlook looks good but not so strong as to reduce the unemployment rate very quickly; I don't see inflationary pressures at the moment," Evans told business leaders in Chicago in response to an audience question.

" So I think we will continue to have an accommodative policy stance for quite some time," he said.
Evans, who is not a voter on the Fed's policy-setting Federal Open Market Committee this year, reiterated that the Fed's pledge to keep rates low for "an extended period" means about six months to him

Source: Reuters

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May Jobs Report: Census Inflates Payrolls

Friday, June 4, 2010

A flood of temporary Census workers in May led to the biggest jump in jobs in ten years, the government reported Friday.

Employers added 431,000 jobs in the month, up from 290,000 jobs added in April. It was the biggest gain in jobs since March 2000.

But Census hiring was responsible for 411,000 of May's increase in employment. Private sector employers also added 41,000 jobs in the period, well below the 218,000 private sector job gains in April. Government payrolls other than Census declined by 21,000 jobs in May, due largely to job cuts by state and local governments.

It was a disappointing number for private sector hiring, as economists surveyed by Briefing.com had forecast an overall gain of 500,000 in May.

" This is a timely reminder that, although the economic outlook is improving, the recovery is still pretty fragile," said Paul Ashworth, senior U.S. economist for Capital Economics.

Despite the spike in hiring, the unemployment rate declined only modestly, to 9.7% from 9.9% in April. Economists had forecast it would decline to 9.8%.

After nearly two years of constant job losses, the U.S. economy has added 982,000 jobs so far in 2010, adding workers in every month, a sign that the labor market is improving beyond the short-term Census jobs. But the modest gain shows that employers are still cautious about adding staff.

Source: CNNMoney.com

Mortgage Rates Sink to Lowest This Year

Thursday, Thursday May 27, 2010

Mortgage rates have fallen to the lowest level of the year as investors poured money into the safe haven of U.S. government securities.

The average rate on a 30-year fixed rate mortgage dipped to 4.78 percent this week from 4.84 percent a week earlier, mortgage company Freddie Mac said Thursday. It was the lowest level since early December, when rates fell to a record low of 4.71 percent.

Concerns over the European debt crisis have sent yields for 10-year and 30-year Treasury bonds to their lowest levels of 2010. Rates on 30-year home loans often rise and fall in line with the 10-year note.

But it's not expected to last. If Europe's woes subside and the U.S. economic recovery stays on track, rates are likely to move higher. That's because traders will move their money back into riskier investments.

" Strike now," said Greg McBride, senior financial analyst at Bankrate.com. "If they move quickly against you, it just takes money right out of your pocket."

Homeowners appear to be taking notice. Applications to refinance surged this week to the highest level since October 2009, the Mortgage Bankers Association said Wednesday.

But mortgage applications to purchase homes fell to the lowest level since April 1997. A major reason for that drop: tax credits expired on April 30.

A campaign by the Federal Reserve to reduce borrowing costs for consumers pushed rates down to extraordinarily low levels last year. Rates were expected to rise after the program ended this spring. Instead, they have dipped. Fears that Greece's government would default on its debt shook world markets and boosted demand for U.S. Treasurys.

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.

This week, the average rate on a 15-year fixed-rate mortgage was 4.21 percent. That's down from 4.24 percent last week and the lowest level on records dating back to August 1991.

Rates on five-year, adjustable-rate mortgages averaged 3.97 percent, up from 3.91 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 3.95 percent from 4 percent. That was the lowest average since May 2004.

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 a point for 30-year, 15-year and 5-year loans. The average fee for 1-year loans was 0.6 of a point.

Source: Associated Press

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Economic Growth Lowered in First Quarter

Thurday, May 27, 2010

The economy grew at a slower pace than previously estimated in the first quarter as business investment slackened, while hard-hit state and local governments reduced spending at the steepest rate since 1981.

Gross domestic product expanded at a 3.0 percent annual rate, the Commerce Department said on Thursday, instead of the 3.2 percent pace it reported last month.

Analysts polled by Reuters had forecast GDP, which measures total goods and services output within U.S. borders, growing at a 3.4 percent rate in the January-March period. The economy expanded at a 5.6 percent pace in the fourth quarter and has now grown for three straight quarters.

Economists are monitoring the U.S. recovery closely to see how well the economy can endure the debt troubles that threaten to slow Europe's growth. The above-trend first-quarter U.S. growth suggests a solid base of support.

" The numbers are slightly shy of hopes, but they show that the U.S. economy is in recovery," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.

Separately, new applications for state jobless benefits dropped to 460,000 last week from 474,000 in the prior week, the Labor Department said, pointing to a gradual labor market recovery.

U.S. stocks were higher at the open, while Treasury debt prices were down sharply in early trade. The U.S. dollar fell versus the euro.

Source: Reuters

Tax Credit Boost New-Home Sales in April

Wednesday, May 26, 2010

Sales of newly built, single-family homes surged 14.8 percent to a seasonally adjusted annual rate of 504,000 units in April as consumers rushed to beat the deadline for expiring home buyer tax credits, according to data released by the U.S. Commerce Department today. This was the strongest level of new-home buying activity since May of 2008.

"Clearly the home buyer tax credit program, which concluded at the end of April, was successful in getting the housing market moving again by helping many families achieve the dream of homeownership," said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. "Now that the program is over, other great buying incentives continue - including exceptionally favorable mortgage rates, very attractive home prices and the steadily improving economy - so there is good reason to expect the positive momentum to continue."

"The surge of buying activity we have seen in the final two months of the tax credit program has been very encouraging, and has helped builders work down their standing inventories to near historic lows," said NAHB Chief Economist David Crowe. "It stands to reason that this activity will level off over the next few months, as sales that would have occurred during that time were likely pulled forward to meet the April deadline. That said, today's favorable home buying conditions, the recovering job market and reviving consumer confidence should help take the place of tax incentives to generate buyer demand."

Three out of four regions posted substantial gains in new-home sales in April; the Midwest registered a 31.6 percent gain, the South, a 10.8 percent gain, and the West, a 21.7 percent gain. The Northeast posted no change in sales activity from the previous month.

The nationwide inventory of new homes on the market fell 5.8 percent to 212,000 units in April, its slimmest measure since October of 1968. Meanwhile, the month's supply at the current sales pace declined from 6.2 in March to a modest 5.0 in April, the lowest since November of 2005.

Source: NAHB

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Home Refinancing Jumps While Purchasing Slumps

Wednesday, May 26, 2010

U.S. mortgage applications to refinance home loans jumped to a seven month high last week as rates neared record lows, but purchase demand remained stuck at a 13-year low.

Interest rates on 30-year fixed-rate mortgages, the most widely used loan, reached their lowest level since late-November 2009, the Mortgage Bankers Association said on Wednesday. Low mortgage rates may prove to be the saving grace for the housing market as it copes with the expiration of popular home buyer tax credits.

The MBA said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended May 21, increased 11.3 percent.

The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 4.4 percent.

" Refinance application volume jumped last week as continuing financial market turmoil related to the budget crises in Europe extended the opportunity for homeowners to lock in at historically low mortgage rates," Michael Fratantoni, MBA's Vice President of Research and Economics, said in a statement.

The MBA's seasonally adjusted index of refinancing applications increased 17.0 percent, its third straight weekly rise, reaching the highest level since the week ended October 2009.

Lower mortgage rates reduce monthly payments for those who are refinancing, putting more cash into their hands to funnel into the economy. However, many have found themselves restricted due to tight lending standards or unemployment and others cannot refinance because they are "underwater," meaning they owe more on their mortgage than their home is worth.

Ellen Bitton, president and CEO of Park Avenue Mortgage Group in New York, said low rates have been a boon for business.

" Telephones are ringing off the hook for refinancing."

" The expiration of the home buyer tax credits have reduced the pace of purchases, particularly at the lower to middle end of the markets," she said.

The government's recently expired home buyer tax credits likely pulled some sales into April that would otherwise have occurred in May or later. Buyers seeking to take advantage of the tax credits had to sign purchase contracts by April 30 and have until June 30 to close on the sales.

The MBA's seasonally adjusted purchase index, a tentative early indicator of home sales, decreased 3.3 percent, its third straight weekly drop, reaching the lowest since April 1997.

A further decline in the coming weeks would point to potentially bigger effects on home sales and construction.

The MBA said borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.80 percent, down 0.03 percentage point from the previous week, reaching the lowest level since the week ended November 27, 2009.

Interest rates were nearly at their year-ago level of 4.81 percent. An all-time low of 4.61 percent was set in the week ended March 27, 2009. The survey has been conducted weekly since 1990.
The MBA said fixed 15-year mortgage rates averaged 4.25 percent, up from 4.19 percent the previous week. Rates on one-year adjustable-rate mortgage, or ARMs, increased to 6.83 percent from 6.81 percent.

Source: Reuters

Plenty of Reasons to Buy a Home Even After the Tax Credit

Monday, May 24, 2010

Even though the home buyer tax credit expired on April 30 and won't be renewed, there may never be a better time to buy a home than today, according to the National Association of Home Builders (NAHB). Many outstanding opportunities still exist for home buyers, but they may not be around forever.

"The home buyer tax credit was just one of many factors motivating Americans to buy homes," said NAHB Chairman Bob Jones, a builder and developer in Bloomfield Hills, Mich. "But buyers can still take advantage of today's low interest rates and competitive prices to get a home they may not have been able to purchase just a few years ago."

Besides mortgage interest rates that have been hovering at near-record lows, homes in many markets have become more affordable. Prices have moderated from the highs of the housing boom that occurred in most of the country, especially in major markets where they had increased significantly.

Today's new homes are also built to be much more energy efficient than homes constructed a generation ago, making them more affordable to operate. New homes are designed to support modern lifestyles with open floorplans, flexible spaces, improved safety features, and low-maintenance materials.

Consumers who are thinking about buying a home should not count on interest rates or prices staying at current levels, however. Mortgage rates are sensitive to market conditions, and even a slight increase can push monthly payments beyond a family's budget. As the country recovers from the recession and people stabilize their financial situations, NAHB economists expect that home prices will begin to increase by 2011.

Source: NAHB

Sales of Previously Owned Homes Jump 7.6 Percent

Monday, May 24, 2010

Home sales surpassed expectations for April as government incentives provided a temporary boost to the housing market.

The National Association of Realtors said Monday that sales of previously owned homes rose 7.6 percent to a seasonally adjusted annual rate of 5.77 million. That was the best showing in five months and better than the 5.63 million units economists had expected.

The increase in sales sparked a rise in home prices. The median price for a new home rose to $173,100, up 4 percent from a year ago.

The federal government provided a big boost to home sales this spring by offering first-time buyers a tax credit of up to $8,000. Homeowners looking to upgrade were able to qualify for a credit of up to $6,500. The deadline for getting a signed sales contract was April 30.

Sales were up in all parts of the country except the West. The gains were led by a 21.1 percent jump in the Northeast and a 9.9 percent rise in the Midwest. Sales also rose 8.6 percent in the South.

The only region of the country that saw sales decline was the West, where sales dropped by 6.2 percent from March.

The big question facing the housing market is what happens now that the government's tax credits have expired.

" No doubt there will be some temporary fallback in the months immediately after it expires," said Lawrence Yun, chief economist at the Realtors.

But Yun said that the improving economy has led to an upswing in consumer confidence, which should help support sales in the months ahead.

Source: Assocated Press

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Housing Stays Highly Affordable For Fifth Consecutive Quarter

Thursday, May 20, 2010

Nationwide housing, bolstered by favorable interest rates and low house prices, hovered for the fifth consecutive quarter near its highest level of affordability since the series was first compiled 19 years ago, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) released today.

The HOI showed that 72.2 percent of all new and existing homes sold in the first quarter of 2010 were affordable to families earning the national median income of $63,800, slightly higher than the previous quarter and near the record-high 72.5 percent set during the first quarter a year ago.

"Today's report is very encouraging because it indicates that homeownership continues its more than year-long trend of remaining within reach of more households than it has for almost two decades," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "With interest rates still hovering at low levels, companies starting to hire new employees and the economy beginning to rebound, this should encourage more home buyers to enter the market and help further stabilize housing and the economy."

Indianapolis-Carmel and Youngstown-Warren-Boardman, Ohio-Pa., shared the ranking as the most affordable major housing markets in the country. In Indianapolis, which has held this top ranking for nearly five years, almost 95 percent of all homes sold were affordable to households earning the area's median family income of $68,700. In Youngstown, the same percentage of homes were affordable to households earning a median $53,500.

Also near the top of the list of the most affordable major metro housing markets were Syracuse, N.Y.; Dayton, Ohio; and Grand Rapids-Wyoming, Mich.

Five smaller housing markets posted even higher affordability scores than Indianapolis and Youngstown. Among them, Bay City, Mich., where 98.7 percent of homes sold during the first quarter of 2010 were affordable to median-income earners, was the most affordable market in the country. Other smaller housing markets near the top of the index included Kokomo, Ind.; Davenport-Moline-Rock Island, Iowa-Ill.; Sandusky, Ohio; and Elkhart-Goshen, Ind., respectively.

New York-White Plains-Wayne, N.Y.-N.J., continued to lead the nation as its least affordable major housing market during the first quarter of 2010. Slightly less than 21 percent of all homes sold during the quarter were affordable to those earning the New York area's median income of $65,600. This was the eighth consecutive quarter that the New York metropolitan division has occupied this position.

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 first quarter. Others near the bottom of the chart included Ocean City, N.J; Santa Cruz-Watsonville, Calif.; Napa, Calif.; and Flagstaff, Ariz.

Source: NAHB

Mortgage Delinquencies, Foreclosures Break Records

Wednesday May 19, 2010

The number of homeowners who missed at least one mortgage payment surged to a record in the first quarter of the year, a sign that the foreclosure crisis is far from over.

More than 10 percent of homeowners had missed at least one mortgage payment in the January-March period, the Mortgage Bankers Association said Wednesday. That number was up from 9.5 percent in the fourth quarter of last year and 9.1 percent a year earlier.

Those figures are adjusted for seasonal factors. For example, heating bills and holiday expenses tend to push up mortgage delinquencies near the end of the year. Many of those borrowers become current on their loans again by spring.

Without adjusting for seasonal factors, the delinquency numbers dropped, as they normally do from the winter to spring.

More than 4.6 percent of homeowners were in foreclosure, also a record. But that number, which is not adjusted for seasonal factors, was up only slightly from the end of last year.

Jay Brinkmann, the trade group's chief economist, said the foreclosure crisis appears to have stabilized. Seasonal adjustments may be exaggerating the change from the previous quarter, he added.

" I don't see signs now that it's getting worse, but it's going to take a while," he said. "A bad situation that's not getting worse is still bad."

Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit. But homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures.

Those borrowers made up nearly 37 percent of new foreclosures in the first quarter of the year, up from 29 percent a year earlier.

The risky subprime adjustable-rate loans that kicked off the foreclosure crisis are making up a smaller share of new foreclosures. They made up 14 percent of new foreclosures in the January-March period, down from 27 percent a year earlier.

Source: Associated Press

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Loan Demand to Buy Homes Sinks to 13-Year Low

Wednesday May 19, 2010

Demand for loans to buy U.S. homes shriveled to a 13-year low last week, following the expiration of federal tax credits, while near-record low mortgage rates stoked refinancing, the Mortgage Bankers Association said on Wednesday.

Mortgage purchase applications sank 27.1 percent to the lowest level since May 1997 in the absence of the popular government support, the group said. U.S. housing groped for footing after more than a year of homebuyer tax credits worth up to $8,000 expired on April 30.

Requests for home purchase loans have fallen almost 20 percent over the past month despite low borrowing costs.

" It's disturbing," said John Canally, economist at LPL Financial in Boston.

" It seems that every other data point for housing is pretty good -- high affordability, low interest rates, relatively low inventory, home prices are up -- so I'm leaning toward the hangover from the tax credit but I'm going to need to see a couple of more weeks of data."

Overall loan requests were down 1.5 percent, on a seasonally adjusted basis, in the week ended May 14, cushioned by a 14.5 percent jump in mortgage refinancing applications as home loan rates neared historic lows.

Average 30-year mortgage rates fell 0.13 percentage point last week to 4.83 percent, the lowest since last November, the MBA said. The record low was 4.61 percent in March 2009, based on the group's survey, which has been conducted since 1990.

Refinancing applications jumped to a nine-week high and accounted for about 68 percent of all applications last week.

But buyers took a low profile after rushing en masse to take advantage of the tax incentive.

" The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season," Michael Fratantoni, the industry group's vice president of research and economics, said in a statement.

The MBA separately reported that total U.S. home loans that are late paying or in foreclosure eased in the first quarter but remained near record highs, largely because the country's unemployment rate remains elevated.

One out of seven U.S. households with a mortgage ended the first quarter late on payments or in the foreclosure process.

With the tax credits gone, home shoppers will take more time to find the right property, said Marc Demetriou, branch manager/mortgage consultant at Residential Home Funding Corp in Bloomingdale, New Jersey.

Unemployment is definitely still an issue and inventory is still an issue, but it's definitely a buyer's market," he said. However, "people that were serious about buying worked very hard and spent a lot of time and effort to find the right house to get in for April 30," when the tax credit expired,

Source: Reuters

Optimistic Outlook for Housing, But Challenges Remain

Wednesday May 19, 2010

Economists participating in yesterday's NAHB Construction Forecast Conference Webinar agreed that the housing market is on the road to recovery, but cautioned that several factors could contribute to a bumpy ride in the coming months.

"Home buyer tax credits clearly did their job and got people back into the marketplace," said NAHB Chief Economist David Crowe, who also served as moderator of the two-hour webinar.

With the expiration of the tax credits in April, Crowe said the housing momentum is being carried forward by low interest rates, pent up household formations, stabilizing prices and budding employment growth.

However, many factors continue to drag on housing at this time - including the critical shortage of credit for new and existing projects, competition from short sales and foreclosures and regional economic disparities.

The availability of acquisition, development and construction (AD&C) financing remains a major concern as the industry moves forward, Crowe said. "Builders still tell us that credit is extremely tight. Banks are saying not so much. That gap is an indication that something is broken, at least when it comes to residential construction."

NAHB is forecasting 552,000 single-family starts in 2010, up 25 percent from last year's 445,000 level, which was the lowest annual output since 1959 when the government began collecting this data.

Suffering from an acute shortage of available financing and a significant shadow inventory of homes lost to foreclosure that are competing against normal inventory, Crowe said that multifamily housing starts are expected to lose further ground this year, falling 18 percent to 93,000 units, before rebounding to 150,000 units in 2011.

Crowe anticipates that nationwide home prices will remain flat this year and post a modest increase in 2011 and that mortgage interest rates will continue to stay low, barely breaking 6 percent by the end of this year, and not rising much above that level through 2011.

Source: NAHB

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Housing Starts Rise 5.8 Percent in April

Tuesday, May 18, 2010

Nationwide housing starts rose 5.8 percent to a seasonally adjusted annual rate of 672,000 units in April as the deadline for an important home buyer tax incentive arrived, according to figures released today by the U.S. Commerce Department.

"While some of the starts activity noted in today's report reflected homes for which buyers had just signed a contract at the tail-end of the tax credit program, the rest was probably tied to builders replenishing their inventories in preparation for the post-tax credit era," said Bob Jones, Chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. "That said, builders are maintaining a cautious attitude with regard to new building as the economy and housing markets slowly recover."

"The government's latest numbers indicate that production of new single-family homes got a substantial boost in April as the tax credit program wrapped up and builders worked to resupply their depleted inventories," agreed NAHB Chief Economist David Crowe. "As our latest surveys have indicated, builders are anticipating that factors such as low mortgage rates, attractive prices and the recovering employment market will replace the tax credit as incentives to buy. Meanwhile, the drop-off in building permits in April indicates that builders are working down the inventory of permits pulled in the previous month and taking care not to get ahead of the market. Builders also continue facing difficulty in obtaining project financing, which will limit the pace of a housing recovery."

Single-family housing starts surged 10.2 percent to a seasonally adjusted annual rate of 593,000 units in April, the strongest rate since August of 2008. Meanwhile, multifamily starts posted an 18.6 percent decline to a 79,000-unit rate, offsetting a big gain posted by that sector in the previous month.

Permit issuance, which can be an indicator of future building activity, declined 11.5 percent overall to a seasonally adjusted annual rate of 606,000 units in April. This reflected a 10.7 percent decline to a 484,000-unit rate on the single-family side and a 14.7 percent decline to a 122,000-unit rate on the multifamily side.

Three out of four regions posted solid gains in new housing production in April. Combined single- and multifamily starts rose 23.9 percent in the Northeast, 16.7 percent in the Midwest and 7 percent in the South. The West registered a 13.3 percent decline.

Source: NAHB

New Home Construction Surges 41%

Tuesday, May 18, 2010

New home construction skyrocketed 40.9% in April compared to last year, according to a government report released Tuesday.

Housing starts increased to a seasonally-adjusted annual rate of 672,000 last month, the Commerce Department said. That was a 5.8% rise over March 2010.

Economists were expecting housing starts to jump to 655,000.

New construction of single-family homes, the key sector of the housing market, rose 10.2% over the month to an annual rate of 593,000.

New construction of multi-family homes -- buildings with 5 or more units -- was 68,000.

April was the last month in which sales to first-time home buyers could qualify for a federal tax credit of up to $8,000. Earlier this year lawmakers extended the deadline through April 30 and added a new credit of up to $6,500 for some existing home owners who move.

The increase in demand prompted by the tax credit has lifted construction," wrote Ian Shepherdson, economist at High Frequency Economics, in a research note.

" But the expiration of the credit ... has made homebuilders wary about continuing to add new homes during the summer," he said.

Source: CNNMoney.com

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Builder Confidence Continues to Strengthen in May

Monday, May 17, 2010

Builder confidence in the market for newly built, single-family homes rose for a second consecutive month in May to its highest level in more than two years, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI gained three points to 22 in May, its highest point since August of 2007.

"Builders surveyed for the HMI at the beginning of May were undoubtedly reacting to the heightened consumer interest they had just witnessed as the deadline for home buyer tax credits arrived at the end of April," said Bob Jones, Chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. "Builders are also hopeful that the solid momentum that the tax credits initiated will continue even now that those incentives are gone."

"The really encouraging part of today's HMI is that sales expectations for the next six months continued to gain, despite the expiration of the home buyer tax credits at the end of April," said NAHB Chief Economist David Crowe. "This means builders are more comfortable that the market is truly beginning to recover, and that positive factors for buying a new home - low interest rates, great selection, stabilizing prices, and a recovering job market - are taking the place of tax incentives to generate buyer demand."

Crowe was quick to point out, however, that while builder confidence has improved from the depths of the housing downturn, it is still quite low by historic standards. "Obviously we still have a long way to go, and it's worth repeating that continued challenges such as the critical lack of project financing, inappropriate appraisal procedures, competition from short sales and foreclosures, and the soaring costs of some building materials are major obstacles on the path to a healthier housing market and economy," he said.

Source: NAHB

Mortgage Rates Drop to Lowest Level This Year

Thursday, May 13, 2010

Mortgage rates fell this week to the lowest level of the year. The drop was caused by a high demand for U.S. government securities, which closely track mortgage rates, as investors fled risky European debt.

The average rate on a 30-year fixed rate mortgage dipped to 4.93 percent this week from 5 percent a week earlier, Freddie Mac said Thursday. It was the lowest level since mid-December, when rates averaged 4.81 percent.

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 tracking the interest rate paid on long-term Treasury bonds.

The average fixed rate dropped to a record low of 4.71 percent late last year, pushed down by a campaign by the Federal Reserve to reduce borrowing costs for consumers. The program ended this spring, but rates have remained low, especially after fears that Greece's government would default shook world markets.

" In times of nervousness, everybody seeks the safe haven," said Greg McBride, senior financial analyst at Bankrate.com

The last time rates for 30-year fixed mortgages averaged less than 5 percent was the week of March 25, when they were 4.99 percent.

This week, the average rate on a 15-year fixed-rate mortgage was 4.3 percent, down from 4.36 percent last week.

Rates on five-year, adjustable-rate mortgages averaged 3.95 percent, down from 3.97 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.02 percent from 4.07 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 of a point for 30-year loans 0.6 of a point for 15 year, 5-year and 1-year loans.

Source: Associated Press

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Active Adult Home Builder Activity, Confidence Remain Low

Wednesday, May 12, 2009

Builder confidence in the mature-housing market remained weak, according to 2010 first-quarter data from the National Association of Home Builders' 55+ Housing Market Index (55+ HMI) - a quarterly survey of the association's builder members engaged in the production of mature-market housing.

"The 55+ segment of the market is still stalled in most regions," said NAHB's Chief Economist, David Crowe. "Since the builders' potential buyers are having difficulty selling their existing property, they are unable to move to a more appropriate home." Noting that a large share of prospective buyers for active adult housing are still in the workforce, and expect to remain so, Crowe added that "many buyers and renters are concerned about their current job security, and may be holding off on any decision to move until the economy becomes more predictable."

The 55+ single-family HMI measures builder sentiments based on current sales, prospective buyer traffic and anticipated six-month sales for the 55+ single-family market. A number greater than 50 indicates that more builders view conditions as good than poor. Although the index recorded a slight rise in the first quarter of 2010 - moving up two points to 19 from its 2009 Q1 level of 17 - the level of confidence remains low.

The two-point rise in the index was a result of a rise in the present sales component to 17, from last year's first quarter level of 13 - possibly reflecting some increased activity fueled by the tax credit. But builder expectations for the next six months remained at 30, the same level reported by builders in the first quarter of 2009. Traffic of prospective buyers also remained at the same level - 18 - as the previous year's first quarter.

The 55+ multifamily condo HMI, already weak, dropped from 13 to 11 year over year - matching its lowest level in the six-quarter history of the series. Expectations for the next six months are at 17 - down from 20 a year ago. Traffic of prospective buyers also dropped, from 15 to 12.

Builder sentiment in the 55+ multifamily rental sector is based on current and expected production, as well as present and expected demand for existing units. In the first quarter of 2010, the current production index stood at 131, but responses show the current demand index at 28. The index level for expectations of demand six months from now hit 34, yet production levels are expected to rise only slightly, if at all, as reflected in an index number of 19. These numbers indicate that respondents anticipate growing rental demand, but little growth in production of new rental apartments to support that demand.

Source: NAHB

Stock Makes a Bid for Bison

Tuesday, May 11, 2009

Stock Building Supply has entered into an agreement to purchase the assets of Bison Building Materials, a Houston-based pro dealer that filed for Chapter 11 last year. Under the terms of the agreement, Stock will purchase Bison’s assets under section 363 of the U.S. Bankruptcy Code, which allows a debtor to sell its assets free and clear of any liens or third party claims.

The sale must still gain bankruptcy court approval. Stock said it expected to close the deal on or shortly after June 29.

Tom Tolleson, chief operating officer of Bison, said in a prepared statement: “This is an exciting opportunity for Bison, our customers and employees. Stock’s national reach, financial stability and strong customer relationships make it an ideal partner for Bison. We look forward to working with Stock’s management team to ensure a smooth and rapid transition.”

Tolleson told Home Channel News that Bison currently operates five facilities in three separate locations. Neither Stock nor Bison would comment on future plans for those units.

Bison Building Materials filed a reorganization plan in U.S. Bankruptcy Court in Houston on June 28, 2009, citing reduced access to credit combined with significant losses from its expansion into several Western markets. At the time, the company was operating nine units in and around Houston and Beaumont, Texas. Bison had already closed or consolidated 16 units.

Source: Home Channel News Pro Dealer Digest

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ABC Supply to Acquire Bradco

Tuesday, May 11, 2009

In a blockbuster deal announced today, Avenel, N.J.-based Bradco Supply signed a definitive agreement to be acquired by ABC Supply.

The transaction will create a national distributor of exterior building materials with 479 locations in 45 states and the District of Columbia. Combined sales of the new entity will be about $4 billion.

The acquisition is expected to close by the end of June, the company announced today, after receiving regulatory approvals. Until the close of the transaction, Bradco branches will operate independently of ABC and will continue to provide the same high level of customer service and support for which Bradco is known.

" This is an exciting time for all Bradco constituents: our customers, our vendors and especially our employees," said Larry Stoddard, Bradco's CEO. "The combination with ABC will create an even stronger company with exciting growth prospects and a continued focus on customer service."

" The addition of Bradco is consistent with our mission to be the best distributor of exterior building products and one of the very best places to work in America," said David Luck, ABC Supply's president and CEO.

" We will welcome the addition of Bradco into the ABC family and look forward to the opportunities that this acquisition will create for our associates and the enhanced value it brings to our customers."

Source: Home Channel News Pro Dealer Digest

Real Estate's New Problem: Not Enough Homes

Tuesday, May 11, 2009

Can it be possible? Despite the housing bust and high foreclosure rates, in some areas real estate agents are complaining that they don't have enough homes to sell.

There is currently an eight-month supply of homes on the market -- meaning that, at the current sales pace, it would take eight months to run through the backlog.

That's still a lot compared to the six-month supply that is expected in a normal market, but it is much better than it was. In March, there were nearly 2% fewer homes on the market than there were a year ago, and 21.7% fewer than the record of 4.6 million in July 2008.

In some areas, supplies are even bidding-war tight. In Denver, for example, supply has fallen to 5.7 months from 6.2. In Phoenix it has declined to 4.5 from 5.2; and in San Francisco inventory has halved, to 3.2 months from 6.5 last March.

In California, almost all cities have a short supply of single-family homes. That's especially true in the lower-priced categories, according to Leslie Appleton-Young, chief economist for the California Association of Realtors.

The supply of homes that sell for less than $300,000 is at 3.2 months statewide, down from an already low 3.3 month supply 12 months ago.

Inventory of moderately priced homes, those between $300,000 and 500,000, fell to 4.2 months in March, down from 4.5 months in March 2009.

There are plenty of more expensive homes in California, but this inventory is going quick: inventory for million-dollar-plus homes has dropped from 21.6 months to 10.9 months.

Source: CNNMoney.com

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Golden State Names New CEO

Monday, May10, 2010

Golden State Lumber, a four-unit pro dealer in Northern California, has announced the appointment of Jessica Scerri as its new CEO. Scerri will succeed her father, Lee Nobmann, who is retiring after 30 years.

Headquartered in Petaluma, Golden State operates four locations: San Rafael, Newark, Brisbane (called Sierra Point Lumber) and Stockton.

Scerri’s team will consist of Rick Zaslove, president; Rob Scerri, chief operating officer; Bob Bowler, CFO; Ralph Panttaja, general manager; Tom Schmierer, sales manager; Dennis Finnie, controller at Golden State Lumber in San Rafael; Danny Della-Santina, general manager; Tamara Heath, corporate controller, Sierra Point Lumber in Brisbane; Daren Blonski, general manager, Golden State Lumber in Newark; Larry Janes, general manager; Beau Nobmann, sales manager; and Patti Blosser, controller, Golden State Lumber in Stockton.

Source: Home Channel News Pro Dealer Digest

Economy Grows for Third Straight Quarter

Friday, April 30, 2010

The U.S. economy kept growing in the first three months of this year but at a much slower pace than at the end of 2009, according to a government report Friday.

Gross domestic product, the broadest measure of the nation's economic activity, rose at a 3.2% annual rate in the quarter, the Commerce Department said.

That's down from the 5.6% growth rate in the fourth quarter, and slightly below economists' forecasts for a 3.3% increase.

The report marked the third straight quarter of growth, confirming the view of many economists that the recession that started in December 2007 ended at some point in the middle of last year.
" Each additional quarter of GDP growth is a welcome sign that the economy is healing from a severe recession that cost over eight million jobs and wiped out trillions of dollars in household and family wealth," said Christina Romer, chair of the White House Council of Economic Advisers, in a statement.

But Romer cautioned that "given the severity and depth of the recession, it will take a number of quarters of robust growth and strong employment gains to return the economy to full health and full employment."

By some measures, the latest report showed more substantial growth than the fourth quarter.
" Despite a softer headline number than we had expected, this is an encouraging report," said economist Peter Newland of Barclays Capital.

In the fourth quarter, most of the growth was due to businesses no longer making the deep cuts in inventories that they had made early in 2009 when they were concerned about a sharp fall-off in demand. But the rise in consumer spending was fairly modest in the fourth quarter, increasing at only a 1.6% annual rate.

Source: CNNMoney.com

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NAHB and OSHA Renew Alliance to Protect Worker Safety

Friday, April 30, 2010

The National Association of Home Builders (NAHB) and the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) have renewed their formal commitment to work together to provide the residential construction industry with information, guidance, and access to training resources that will help them protect the health and safety of workers.

The alliance was signed at a ceremony at the U.S. Department of Labor's offices in Washington on April 19 by NAHB Chairman Bob Jones, a builder and developer in Bloomfield Hills, Mich., and Assistant Secretary of Labor for OSHA, Dr. David Michaels.

"NAHB has worked with OSHA since 2003 to protect and educate residential construction employees across the country," said Jones. "Through this alliance, hundreds of thousands of workers have benefitted from safety seminars, publications, articles and information on the NAHB and OSHA websites."

In 2009 and 2010, OSHA officials gave educational presentations to attendees at NAHB's International Builders' Show and Spring Board of Directors meetings. NAHB participated in the North American Occupational Safety and Health Week kick-off event, which focused on the theme "Safety Means Always Coming Home," at the U.S. Department of Labor.

Source: NAHB

Remodeling Markety Poised for Recover

Thursday, April 29, 2010

The decline in remodeling activity may be reaching an end, according to the latest National Association of Home Builders' (NAHB) Remodeling Market Index (RMI). Current market conditions jumped to 47.0 from 36.4 in the fourth quarter of 2009. Future indicators of remodeling business leapt to 48.9 from 31.4 in the last quarter. A new unified measure incorporating both current and future conditions, called the RMI Index, rose to 47.9 from 33.9 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, but the first quarter 2010 is the best showing since the first quarter of 2006.

"Remodelers are receiving more calls for work, but getting signed contracts is still challenging" said NAHB Remodelers Chairman Donna Shirey, CGR, CAPS, CGP, a remodeler from Issaquah, Wash. "We're working a little more, but not making more due to tighter margins, onerous federal regulations, and consumer anxiety about making large purchases."

Source: NAHB

Home Prices Inch Up

Tuesday, April 27, 2010

February home prices posted their first year-over-year increase since December 2006, according to a report out today.

Home prices inched up 0.6% compared to February 2009 according to the S&P/Case-Shiller 20-city index, with nine of the 20 cities showing gains.

" The homebuyer tax credit, available until the end of April, is the likely cause for these encouraging numbers," said David Blitzer, chairman of the index committee at S&P.

But home prices actually fell by 0.9% compared with January. The dip was small enough to put prices in positive territory compared with 12 months earlier, when home prices were falling very steeply.

Indeed, 18 cities saw month-over-month price declines in February and six cities, including New York, Las Vegas and Seattle, posted new lows for this downturn.

" These data point to a risk that home prices could decline further before experiencing any sustained gains," said Blitzer. "It is too early to say that the housing market is recovering."

As of February, prices are about where they were in the Fall of 2003. Prices for the 20-city index are down 32.6% from their peak in July 2006, wiping out all of the gains from the housing boom.

Source: CNNMoney.com

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Source: Reuters

Armed Service Members Have Extra Year For Home Buyer Tax Credit

Monday, April 26, 2010

The National Association of Home Builders (NAHB) wants members of the military, foreign service and intelligence communities to know that they may have an additional year to buy a home and claim the home buyer tax credit, which expires for most Americans on April 30.

The law provides qualified service members who served on official extended duty outside of the United States for 90 days or more at any time between Jan. 1, 2009, to April 30, 2010, another year to buy a home and claim the credit. They have until April 30, 2011, to sign a sales contract, and until June 30, 2011, to settle and close on the home. Both the $8,000 first-time and $6,500 repeat home buyer tax credits are included in the rule.

"Congress recognized that many service members may have missed out on the home buyer tax credit due to being posted overseas," said NAHB Chairman Bob Jones, a builder and developer in Bloomfield Hills, Mich. "It is only fitting that they be given another year to take advantage of this opportunity in appreciation of the sacrifices they have made serving our country."

"Qualified service members" are defined as a member of the uniformed services of the United States military, a member of the Foreign Service of the United States, or an employee of the intelligence community.

The rule that requires buyers to repay the credit if they move out of their home within three years has also been waived for qualified service members if they have to sell their home due to receiving government orders for extended duty service.

Source: NAHB

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Ending Tax Credit Triggers New-Home Sales Surge in March

Friday, April 23, 2010

Washington, April 23- With many buyers rushing to take advantage of the federal home-buyer tax credit set to expire in April, sales of newly built single-family homes surged 26.9 percent in March to a seasonally adjusted annual rate of 411,000 units, the Commerce Department reported today. Sales increases were posted in all four regions of the country.

"Undoubtedly, the tax credit is working," said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. "Builders are seeing a growing optimism among consumers."

"The near record-breaking 27 percent increase over February was the result of home buyers taking advantage of the tax credit as well as a carryover of demand that was held back by unusually bad weather in February," said NAHB Chief Economist David Crowe.

"The increased sales are very welcome news and sales will continue to improve, although we expect them to plateau in late spring and early summer when the credit expires. Following that, the housing momentum will be carried forward by low interest rates, pent up household formations, excellent affordability conditions and a budding employment growth," Crowe added.

Regionally, sales increased 35.7 percent in the Northeast, 4.3 percent in the Midwest, 43.5 percent in the South and 5.7 percent in the West.

The nationwide inventory of new homes on the market dropped a negligible 0.8 percent in March, to 227,000 units as builders continued to maintain small inventories. With the increased sales pace and low inventory level, the month's supply of new homes for sale dropped from 8.6 in February to 6.7 in March.

Source: NAHB

Fed Makes Big Profit from Bailout

Thursday, April 22, 2010

The Federal Reserve banks that form the backbone of the nation's financial system transferred an extra-large payload to the U.S. Treasury last year, as they reaped interest from Wall Street bailouts.

The 12 Federal Reserve banks reported that their 2009 income totaled $53.4 billion, a jump of $17.9 billion, or one-third, from the year before.

The board of governors of the Federal Reserve system attributed this increase to a surge in the holding of mortgage-backed securities to prop up the devastated housing market.

The banks said they transferred most of this money, $47.4 billion, to the U.S. Treasury in 2009, an increase of 50%, or $15.7 billion, from the amount they transferred in 2008

Source: CNN Money. com

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Source: CNN Money. com

Economic Signs Show Modest Recovery, Point to Low Rates

Thursday, April 22, 2010

The number of U.S. workers filing new claims for jobless aid fell last week as the labor market gradually heals and producer price data showed inflation remained muted despite a surge in food costs last month.

A rise in sales of previously owned homes in March after three months of declines added to growing optimism about a moderate economic recovery.

The data on Thursday should help persuade the Federal Reserve to renew its pledge to keep benchmark interest rate exceptionally low for an extended period at its regular two-day meeting next week, analysts said.

" Inflation is still not an issue that the Fed is concerned about and the job market is very slowly improving, which is an underpinning for moderate economic growth being sustained," said Stuart Hoffman, chief economist for PNC Financial Services in Pittsburgh.

Initial claims for state unemployment benefits dropped 24,000 to a seasonally adjusted 456,000, the Labor Department said, resuming a downward trend that had been interrupted by the Easter holiday. Markets had expected 455,000

Source: Reuters

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Source: Reuters

Home Construction Rises, Consumer Morale Ebbs

Friday, April 16, 2010

Permits to build new U.S. homes unexpectedly surged in March to their highest level in more than 1-1/2 years, but a surprise dip in consumer confidence tempered optimism over the broadening economic recovery.

Building permits, which give a sense of future home construction, jumped 7.5 percent to a 685,000-unit pace last month, the Commerce Department said on Friday. Markets had expected a 630,000 unit-pace.

New home construction was the highest since November, although the bulk of the rise was in the volatile multifamily segment.

Separately, the Thomson Reuters/University of Michigan's Surveys of Consumers index of consumer sentiment slipped to a five-month low of 69.5 in early April from 73.6 at the end of March. That was below market expectations for 75.0.

Analysts said the drop in consumer confidence, a proxy for spending, was at odds with the rise in retail sales seen in recent months.

" The retail sales continue to show strength as well so these figures are quite surprising. The overall consumer sector is still improving. I'm inclined to think this is an outlier," said Jim O'Sullivan, chief economist at MF Global in New York.

U.S. stocks held losses after the sentiment data, while government bond prices extended gains.
A perception that the recovery is too slow likely contributed to the decline in sentiment early this month, according to the survey's sponsors.

" While consumers think the overall economy will continue to improve, they still hold quite negative views on their own income and job prospects," Richard Curtin, director of the surveys, said in a statement.

Even though consumers are gloomy about their economic prospects, that was not enough to prevent them from investing in new residential property last month.

House starts rose 1.6 percent to a higher than expected seasonally adjusted annual rate of 626,000 units. February's housing starts were revised up to show a 1.1 percent increase, which was previously reported as a 5.9 percent drop.

Markets had expected housing starts to rise to 610,000 units. The bulk of the increase in new home construction came from an 18.8 percent jump in starts for the volatile multifamily segment. Groundbreaking for single-family homes slipped 0.9 percent.

The data was a welcome change after the housing market recovery appeared to have stalled in recent months and sales dropped after strong gains in the second half of 2009.

The sector, a key factor behind the worst economic downturn since the Great Depression, remains one of the headwinds confronting the recovery.

A National Association of Home Builders survey on Thursday showed home-builder sentiment rose to a seven-month high in April as consumers rushed to take advantage of a home-buyer tax credit. Better economic conditions also helped.

New building permits increased across both segments of the housing market and were up 34.1 percent from March 2009, the biggest year-on-year gain since February 1992.

" The surge in single family permits that is the main leading indicator within the report, should be regarded as a very positive sign that the recovery is gaining some momentum even within the weakest sector of the economy," said Alan Ruskin, chief international strategist at RBS Securities in Stamford, Connecticut.

New home completions fell 3.1 percent to a record low 656,000 units. The inventory of total houses under construction dropped 1.4 percent to an all-time low of 489,000 units in March, while the total number of units authorized but not yet started soared 7.5 percent to 103,200 units -- the highest level since June.

Source: Reuters

Foreclosure Rates Surge, Biggest Jump in 5 Years

Thursday, April 15, 2010

A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report.

RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.

More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said.

We're right now on pace to see more than 1 million bank repossessions this year," said Rick Sharga, a RealtyTrac senior vice president.

Foreclosures began to ease last year as banks came under pressure from the Obama administration to modify home loans for troubled borrowers. In addition, some states enacted foreclosure moratoriums in hopes of giving homeowners behind in payments time to catch up. And in many cases, banks have had trouble coping with how to handle the glut of problem loans.

Source: Yahoo Finance

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Jobless Claims in Another Surprise Surge

Thursday, April 15, 2010

The number of Americans filing for unemployment insurance for the first time jumped for the second week in a row, according to government data released Thursday.

There were 484,000 initial jobless claims filed in the week ended April 10, up 24,000 from an unrevised 460,000 the previous week, according to the Labor Department's weekly report.

Economists surveyed by Briefing.com had expected new claims to fall to 440,000 in the latest week. The number of new claims was the highest since the week ended Feb. 20, when initial claims totaled 486,000.

The Labor Department also tracks the four-week moving average of initial claims, which smoothes out volatility in the measure. That number reached 457,750 for the week, up 7,500 from the previous week's downwardly revised average of 450,250.

The Labor Department attributes the jump in initial claims to volatility related to the Easter holiday and other so-called "administrative" factors.

" I agree with this because all of the labor market indicators are looking up" said Gus Faucher, senior economist for Moody's Economy.com.

The number of people filing continuing claims totaled 4,639,000 in the week ended April 3, the most recent data available. That figure was up 73,000 from the preceding week's 4,556,000 claims, and above the 4.58 million economists expected, according to Briefing.com.

The four-week moving average for continuing claims totaled 4,638,500, down 13,750 from the preceding week's revised average of 4,652,250.

Continuing claims data exclude people whose benefits expired or those who have moved to state or federal extensions. It reflects those filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks.

Source: CNNMoney.com

Builder Confidence Improvs in April

Thursday, April 15, 2010

Builder confidence in the market for newly built, single-family homes improved significantly in April as consumers rushed to take advantage of home buyer tax credits set to expire at the end of the month, according to results of the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI surged four points to 19 in April, its highest level since September of 2009.

"Home builders reported some real improvement in current sales activity and traffic of prospective buyers through their model homes over the past month," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "While we remain cautious about what future months will bring, it's great to have this positive momentum at the start of the spring home buying season."

"An expected surge in buyer activity leading up to the expiration of the home buyer tax credits and a gradually improving economy helped to brighten builders' view of the marketplace in April," confirmed NAHB Chief Economist David Crowe. "Meanwhile, builders have a more neutral view of what may come in the next six months, and are very aware of the many factors that continue to drag on housing at this time - including the critical shortage of credit for new and existing projects, problems with inaccurate appraisals, and the ongoing flow of foreclosed properties on the market. Greater economic growth, particularly in the job market, and the abatement of these housing issues are needed to help move home building to a more sustained recovery."

Source: NAHB

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Federal Government Needs Central Role in New Housing Finance System

Wednesday, April 14, 2010

As Congress begins to debate how to reform government-sponsored enterprises (GSEs) Fannie Mae, Freddie Mac and the Federal Home Loan Bank System, the National Association of Home Builders (NAHB) today called on lawmakers to ensure that the federal government continues to provide a backstop for the housing finance system to ensure a reliable and adequate flow of affordable housing credit.

Testifying before the House Financial Services Committee, NAHB Third Vice Chairman Rick Judson, a builder and developer from Charlotte, N.C., said the need for such support is underscored by the current state of affairs, with the GSEs, Federal Housing Administration and Ginnie Mae acting as the primary conduits for residential mortgage credit.

"NAHB feels the federal backstop must be a permanent fixture in order to ensure a consistent supply of mortgage liquidity as well as to allow rapid and effective responses to market dislocations and crises," said Judson.

Regarding the future of Fannie Mae and Freddie Mac, NAHB recommended the following policy changes in terms of structure and operations to restore and improve the secondary mortgage market and housing finance system:

• Degree and structure of government support. While government support is needed to ensure that mortgage credit is available and affordable in all areas of the country under all economic circumstances, for the conforming conventional portion of the mortgage market, that support should not be provided directly to private companies. Rather, the federal government should provide an explicit guarantee of the timely payment of principal and interest on securities backed by conforming conventional mortgages, in the same manner that Ginnie Mae now provides guarantees for investors in securities representing interests in government-backed mortgages.

•Operation of the conforming conventional mortgage market. NAHB envisions that private companies, called conforming mortgage conduits (CMCs), would be chartered to purchase conforming conventional loans that are originated by approved mortgage lending institutions such as banks, savings and loan associations, mortgage banking companies and credit unions. CMCs would issue securities backed by those mortgages, which would carry a federal government guarantee of the timely payment of principal and interest for the securities investors.

CMCs would guarantee the timely payment on the mortgages that are pooled in the government-guaranteed securities and would be required to be well-capitalized and to maintain reserves at levels appropriate for their risk exposure. However, CMCs and the mortgages backing their securities would not have implicit or explicit support from the federal government. A fund would be established by the government to provide a guarantee of timely payment of principal and interest to investors in the securities. CMCs benefitting from the federal securities guarantees would pay a fee to capitalize the fund, which would be designed to mitigate the federal government's risk so that it would only be exposed in the case of a "catastrophic" occurrence.

•Conforming conventional mortgages. Mortgages eligible for inclusion in securities receiving an explicit federal guarantee should be products with well-understood risk characteristics -- such as fixed-rate mortgages, standard adjustable-rate mortgages and selected multifamily mortgage loans.

NAHB is in the process of updating its policy on the future of the Federal Home Loan Bank System and believes that policymakers must account for their significant structural and operational differences from Fannie Mae and Freddie Mac when considering the future make-up of the housing finance system. With Fannie Mae and Freddie Mac now operating under conservatorship and experiencing severe financial pressures, NAHB urged Congress to proceed with caution as lawmakers take steps to transition to a new housing finance system.

"Any changes should be undertaken with extreme care and with sufficient time to ensure that U.S. home buyers and renters are not placed in harm's way and that the mortgage funding and delivery system operates efficiently and effectively as the old system is abandoned and a new system is put in place," said Judson.

Source: NAHB

As Deadline Looms, 10 Million Visit Tax Credit Web Site

Tuesday, April 13, 2010

Interest in the federal home buyer tax credit surged in the first three months of 2010, with the FederalHousingTaxCredit.com Web site reaching a milestone 10 million visits. Spurred by a sense of urgency as the credit's April 30 expiration date approached, the site logged about a million visits each month in January, February and March. The National Association of Home Builders (NAHB) created the site in July 2008.

"FederalHousingTaxCredit.com provides authoritative, unbiased information about the home buyer tax credits and has proven to be a valuable resource for consumers, members of the housing industry and others," said NAHB Chairman Bob Jones, a builder and developer in Bloomfield Hills, Mich. "NAHB went live with the site the same day the credit was signed into law in 2008, and it quickly became the Internet's premier source of information about the credit."

The $8,000 first-time home buyer credit and the $6,500 repeat buyer credit will expire on April 30. However, if buyers sign a sales contract by April 30, the IRS gives them an additional two months--until June 30, 2010--to close the sale of the home.

The site has recently been updated with a new section on the special rules that apply to the military, the foreign service and members of the intelligence community. For qualified service members who are ordered on a period of official extended duty, the dates are extended for one year, through April 30, 2011.

"Home buyers need to remember, that even though the tax credit is about to expire, conditions remain ideal to buy a home," said Jones. "There are plenty of existing homes on the market, interest rates are at near-record lows, and prices are very competitive."

Source: NAHB

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Spring Brings U.S. Housing Renewal as Aid Ends

Thusday, April 8, 2010

Spring could signal a rebirth for the long suffering U.S. housing market even as the economy's weakest link is stripped of government life support.

House sales will be stoked by buyers sprinting to cash in on a federal tax credit program before it expires in April. Signs the U.S. economy has begun to create jobs could also lift business.

Make no mistake, the recovery will be arduous due to high unemployment and foreclosures. But the sector is unlikely to nosedive once the government removes safety nets designed to elevate housing from its worst crash since the Depression, industry experts say.

" The doctor is pulling off the life support system hoping that the patient's heart beats on its own," said James Angel, associate finance professor at Georgetown University's McDonough School of Business in Washington.

Housing dragged the U.S. economy into recession and lags a rebound that began in the second half of 2009. A housing recovery and job growth are key to keeping economic expansion alive as government stimulus peels off.

Federal Reserve purchases of more than $1.4 trillion in mortgage-tied debt slashed home loan rates to record lows while tax credits of up to $8,000 have sealed the deal for many buyers.

Those crutches are being removed, with Fed buying ended March 31, the tax credit window set to close on April 30 and mortgage rates now at an eight-month high.

Angel is among analysts who expects a housing recovery to take root. It will come in fits and starts, with some areas still hashing through stockpiles of foreclosures while others improve with job creation.

Buyer traffic is rising as the weather warms after an unusually harsh winter, with average home prices still 30 percent below 2006 peaks and mortgage rates historically low.

" We think housing could become self sustaining with a sufficient surge this spring and job creation in the second half of the year," National Association of Realtors (NAR) spokesman Walter Molony said.

The real estate industry clamored for, and last year got, an extended first-time buyer credit and a move-up credit but another extension is seen unlikely barring a deep setback.

Almost 3 million first-time buyers and 1.5 million repeat buyers will have taken advantage of the credits, the NAR estimates. Contracts must be signed by the end of April and loans closed by June 30.

The group reported a surprise 8.2 percent jump in home contracts signed in February, with multiple offers on some properties, driven by a push for the credit before it expires.

That bodes well for spring sales, a harbinger of the year's activity, after four months of falling new home sales and three months of existing home sales declines despite incentives.

Source: Reuters

Rates on 30-Year Home Loans Rise to 5.21 PCT

Thursday, April 8, 2010

Rates for 30-year home loans surged last week, rising to the highest level in eight months due to the improving economy and the end of a government push to keep rates low.

The average rate on a 30-year fixed rate mortgage was 5.21 percent this week, up from 5.08 percent a week earlier, Freddie Mac said Thursday. That's the highest since mid-August, when the average rate was 5.29 percent.

Rates had dropped to a record low of 4.71 percent in December, pushed down by a campaign by the Federal Reserve to reduce borrowing costs for consumers. The program ended last week, but the Fed left the door open to reviving the program if the economy weakens.

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 tracking the interest rate paid on long-term Treasury bonds.

Treasury yields have climbed steadily in recent weeks because of weak demand. The government has had to offer a better interest rate to sell its bonds as investors shift toward stocks and riskier corporate debt.

The 10-year yield rose above 4 percent on Monday for the first time since June, but fell back to 3.85 percent on Thursday.

This week, the average rate on a 15-year fixed-rate mortgage was 4.52 percent, up from 4.39 percent last week.

Rates on five-year, adjustable-rate mortgages averaged 4.25 percent, up from 4.1 percent a week earlier. Rates on one-year, adjustable-rate mortgages rose to 4.14 percent from 4.05 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 0.6 of a point for 30-year, 15-year and 5-year loans and 0.5 of a point for 1-year-loans.

Source: Associated Press

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Economy Getting Better, But Still 'A Long Way to Go'

Sunday, April 4, 2010

The slow but steady U.S. economic recovery appears set to continue, with underlying indicators signaling a growing strength, some of the nation's senior economists said Sunday.

" The trend has turned," said Lawrence Summers, director of the White House National Economic Council, on CNN's "State of the Union" program. "But to get back to the surface, we've got a long way to go."

Former Federal Reserve Chairman Alan Greenspan told ABC's "This Week" that the recovery so far has led to conditions for compounding growth. In particular, Greenspan cited an increasing demand for inventory that spurs production as a signal of a possible significant buildup in growth.

" I suspect it's month by month," Greenspan said of continued economic growth, adding that "a statistical aberration is possible."

He said he doubted there would be another drop in growth to create what economists call "double-dip recession" after the downturn of 2008-09, saying the odds were "very much against that now."

On NBC's "Meet the Press," the chair of Obama's Council of Economic Advisers, Cristina Romer, said the recovery would have to be systemic rather than consumer-driven because, in the wake of the recession, "we're not going to be see people maxing out their credit cards again."

Romer predicted economic growth for the year of 3 percent, which she said would be enough to keep creating jobs but not enough to significantly reduce the unemployment rate.

All three spoke two days after the government announced 162,000 news jobs created in March but the unemployment rate remaining at 9.7 percent.

Source: CNN

New CRE Limits Could Jeopardize Housing and Economic Recovery

Monday, March 29, 2010

Proposals by federal banking regulators to tighten restrictions on commercial real estate (CRE) lending could further exacerbate a severe acquisition, development and construction (AD&C) credit crisis that is choking off new home building activity and threatening the fragile housing recovery now under way, according to the National Association of Home Builders (NAHB).

"We have received scores of reports from builders across the nation who have been unable to obtain AD&C financing for viable projects or have experienced adverse treatment regarding an outstanding loan," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "At a time when we are struggling to restore the flow of credit for housing production, any regulatory response to CRE lending must be done in a responsible manner that takes into account the differences between commercial real estate and residential construction loans."

Comptroller of the Currency John Dugan said recently that banking agencies plan to issue new tougher standards to rein in CRE lending and are considering hard limits on the amount of these holdings on bank ledgers as well as more stringent underwriting standards and increased capital requirements for CRE loans.

While NAHB believes that banks should engage in sound, balanced underwriting standards when considering all types of loans, the pendulum has already swung too far on the restrictive side in the current regulatory climate.

"The stories we are hearing from our members all echo the same theme: Banks are not issuing new AD&C loans and are calling loans in good standing in order to get them off their books because of pressure from regulators," said Jones.

At a time when financial institutions need to be engaged in responsible lending practices to spur job creation and economic growth, establishing overly harsh limitations on construction lending will do just the opposite by further stifling the flow of credit for housing production, he said.

"With the housing market struggling to regain its footing, regulators need to be issuing more flexible guidelines that will encourage banks to maintain funding for residential AD&C loans in good standing that fall below their underlying value," said Jones. "Tightening the screws further could have a devastating impact on the housing market and jeopardize the budding economic recovery."

Source: NAHB

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Spring Outlook: Housing Sales Are Looking as Bleak as Ever

Friday, March 26, 2010

It's going to be another bad spring for the US housing market-unless you're a buyer.

With prices still falling and more distressed homes hitting the market, many experts are expecting the market to get even worse before it gets better.

" There's been some increase in inventory lately, mostly from distressed sales," says Walter Malony, spokesman for the National Association of Realtors. "Buyer's are pretty much in the driver's seat."
Even the Obama administration's new plan to help troubled homeowners, while praised by some economists, won't help the market much right away.

The $14 billion program, announced Friday, will try to stem a rising tide of home foreclosures by giving lenders incentives to erase some mortgage debt and slash mortgage payments for the unemployed. But it will take months before there is any impact, experts say.

" This change by the Obama administration is good news," says Mark Zandi, chief economist at Moodys. "It will help homeowners in a meaningful way. We should see the impact of this by the fall with fewer foreclosures. Housing needs this."

In the meantime, home values are continuing to drop and the amount of distressed property on the market is growing.

" There are still a lot of foreclosures in the pipe line," says Greg McBride, chief economist at Bankrate.com. "They're backed up because of paper work at the banks or moratoriums at the state level. But they are the elephant in room. And who knows what will happen when that inventory hits the market. It will more than likely hurt housing prices even more."

One thing that may help the market this spring: fewer people will be voluntarily putting their homes up for sale. That's partly because prices are still falling-but also because they don't feel they can afford to "trade up" to a bigger house.

" People who might want to sell at this time for a bigger home are worried about their jobs," says Bob Walters, chief economist at QuickenLoans. com. "That's keeping them somewhat in check as to whether they will sell or not."

Source: Yahoo Finance

Gov't Unveils Plan to Shrink Some Home Loans

Friday, March 26, 2010

After months of criticism that it hasn't done enough to prevent foreclosures, the Obama administration announced on Friday a plan to reduce the amount some troubled borrowers owe on their home loans.

The multifaceted effort will allow people who owe more on their mortgages than their properties are worth to get new loans backed by the Federal Housing Administration, a government agency that insures home loans against default.

That would be funded by $14 billion from the administration's existing $75 billion foreclosure-prevention program. It could spark criticism that the government is shouldering too much risk by taking on bad loans made during the housing boom.

The plan would also enable the borrowers' existing mortgage companies to receive incentives to lower their principal balances.

To be eligible for the FHA refinancing program, borrowers who owe more than the value of their homes, known as being "under water," must not have fallen behind on their existing mortgage payments.

Separately, the program also would reduce monthly payments for unemployed homeowners for up to six months.

The administration cautioned that the plan isn't intended to stop all foreclosures or assist all troubled homeowners.

" There's no intention here of tackling what may be 10 to 12 million foreclosures over the course of the next three years," said Diana Farrell, a White House economic adviser.

Instead, officials said, the goal is to make it more likely the administration will meet its original target, announced last year, of assisting 3 million to 4 million struggling homeowners.
That would be "enough to provide help to those for whom help is worthwhile ... and to provide some kind of stability in the market."

The plan won't assist investors and speculators or "Americans living in million dollar homes or defaulters on vacation homes," an administration fact sheet said.

Some homeowners will not be able to afford to stay in their homes because they bought more than they could afford, officials said.

Mark Zandi, chief economist at Moody's Analytics, estimated the plan could help an additional 1 million and 1.5 million homeowners avoid foreclosure. That compares with about 4.5 million already in foreclosure proceedings or 90 days delinquent on their mortgages, he said.

But preventing even a fraction of potential foreclosures could help stem the slide in home prices. That would encourage those who are under water to keep paying their mortgages as prices stabilize.

" The changes are wide-ranging and significant and have the real potential for bringing the foreclosure crisis to a much quicker end," Zandi said.

It is the latest effort by the Obama administration to tackle the foreclosure crisis which has continued to grow. Home foreclosures have soared despite the administration's effort to prevent foreclosures, a complex and problem-plagued endeavor involving more than 100 mortgage companies. Only 170,000 homeowners have completed that process out of 1.1 million who began it over the past year.|

" We remain dubious about government mortgage modification efforts," wrote Jaret Seiberg, an analyst with Concept Capital's Washington Research Group. "So far none have lived up to expectations and we see little reason to believe the latest effort will turn out any different."

The plan announced Friday will also require the mortgage companies participating in the administration's existing foreclosure prevention program to consider slashing the amount borrowers owe. They will get incentive payments if they do so.

It also includes three to six months of temporary aid for borrowers who have lost their jobs. And there will be additional payments designed to give banks an incentive to reduce payments or eliminate second mortgages such as home equity loans -- a problem that has blocked many loan modifications.

The plan will also allow lenders to refinance mortgages that are under water with a new loan backed by the FHA. Lenders will have to reduce the first mortgage by at least 10 percent. And the combined total of second mortgages and other liens cannot be more than 115 percent of the current value of the home.

The four big holders of second mortgages -- Citigroup Inc., Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co. -- have now joined the government's program to modify second mortgages, after pressure from the Treasury Department. That program was delayed for months but now the major players in the industry are on board.

Source: Associated Press

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Obama Pushing Mortgage Modification for Jobless

Friday, March 26, 2010

Under fire to do more to stop the foreclosure crisis, the Obama administration announced new mortgage modification steps on Friday to help the unemployed and those who are "underwater" with a bigger loan than their home is worth.

For eligible unemployed borrowers, the effort would require loan servicers to reduce monthly mortgage payments to 31% or less of income -- or even suspend them entirely, an administration official said. The forbearance assistance would last up to six months, after which the borrower would be evaluated for a loan modification.

An administration official declined to comment whether interest or fees would be charged during the forbearance period.

Also, the initiative requires servicers to consider writing down mortgage balances when evaluating borrowers for the president's loan modification initiative, known as Home Affordable Modification Program, or HAMP. Servicers, who have been reluctant to cut loan balances, would receive financial incentives to do so.

The writedown would be available for HAMP-eligible borrowers who owe more than 115% of their home's current value. The balance would be forgiven as long as the homeowner remains current with payments for three years.

Source: CNNMoney.com

Record-Low Rates Needed to Aid Economy

Thursday March 25, 2010

Record-low interest rates are still needed to rev up the economic recovery, Federal Reserve Chairman Ben Bernanke told Congress on Thursday.

Bernanke, in testimony to the House Financial Services Committee, essentially repeated the rationale behind the Fed's decision last week to hold rates near zero. He cited still-fragile economic conditions, and noted that inflation is low, which gives the Fed leeway to keep rates at rock-bottom levels.

The Fed chief didn't offer new clues about when the central bank might reverse course and start tightening credit. He said that would need to happen when the "expansion matures." Some investors and analysts think higher rates could come in the fall.

Deciding when to tighten credit is the biggest challenge facing Bernanke, whose second term started in February. Moving too soon could short-circuit the recovery. Waiting too long could unleash inflation and sow the seeds for new speculative bubbles in stocks or commodities or other assets.

One of the reasons the Fed is holding rates so low is because of stubbornly high unemployment, Bernanke said. It's now at 9.7 percent, a potential restraining force on the economy's rebound.

Bernanke said the Fed "will not be able to wait until things are completely back to normal" before it starts to boost rates. But the Fed wants to make sure that the economy is on a sustainable growth path and that jobs are being created, he said.

" The key point ... is that the Fed is no closer to implementing its exit strategy," said Paul Dales, an economist at Capital Economics. Bernanke's remarks suggest "he is in no hurry" to raise rates, Dales said.

Source: Associated Press

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New-Home Sales Fall to Record Low

Wednesday, March 24, 2010

Sales of new homes fell to a record low in February, according to a government report released Wednesday, as the glut of foreclosed homes and a weak economy dampened the housing market.
New-home sales fell 2.2% to a seasonally adjusted rate of 308,000 last month, compared to a upwardly revised annual rate of 315,000 in January, the Census Bureau said.

It was the lowest rate since the government began keeping records in 1963 and marked the fourth straight month of declines.

A consensus of economists surveyed by Briefing.com expected February sales to rise to an annual rate of 315,000.

New-home sales were down 13% from February 2009.

New-home sales fell in every region of the United States, except the West region, which saw a 20.8% jump in new-home sales. The Northeast was hardest hit, with a 20% decline in February.

" Weather had something to do with declines in the Northeast and Midwest," which took the brunt of the winter storms in February, said Stuart Hoffman, chief economist at PNC Financial Services Group. "But this is still a weak level of buying to start the year."

The Census Bureau data followed a report from the National Association of Realtors on Tuesday that showedexisting home sales slipped in February, as the housing market continued to struggle with a gradual recovery of demand and a glut of inventory.

Source: CNNMoney.com

Unemployment Claims Fall

Thursday, March 18, 2010

The number of Americans filing for initial unemployment insurance fell last week, the government said Thursday.

There were 457,000 initial jobless claims filed in the week ended March 13, down 5,000 from a revised 462,000 the previous week, the Labor Department said in a weekly report.

A consensus estimate of economists surveyed by Briefing.com expected new claims to drop to 455,000.

The 4-week moving average of initial claims was 471,250, down 4,250 from the previous week's unrevised average of 475,500.

" This is a step in the right direction," said John Canally, an investment strategist at LPL Financial. "The 471,250 number is roughly 200,000 below the peak of last March, so this suggests that layoffs are ceasing and now we're just waiting for companies to start to hire."

Canally said that while he was "a little disappointed that [jobless claims] didn't fall even further," it was encouraging to get a clean reading after bad weather and administrative issues had "plagued" the data over the past couple months.

Heavy snowstorms in the Northeast shut down government offices in February. As a result, the Labor Department had a backlog of claims that it wasn't able to process on time, which inflated the numbers in the following weeks. Economists said that the storms and cold weather also led to an increase in job losses within industries such as construction.

Continuing claims: The government said 4,579,000 people filed continuing claims in the week ended March 6, the most recent data available. That's up 12,000 from the preceding week's revised 4,567,000 claims.

The 4-week moving average for ongoing claims fell by 8,000 to 4,575,250 from the previous week's revised 4,583,250.

But the decline may just mean that more filers are dropping off those rolls into extended benefits.
Continuing claims reflect people filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those people who have moved to state or federal extensions, or people whose benefits have expired.

On Wednesday, the House passed a bill to extend the deadline to file for unemployment insurance by one month, through May 5.

However, the deadline to apply for extended benefits is set to expire in coming weeks. Last week, the Senate approved a bill that would push back the deadline until the end of the year, and the bill is now awaiting approval from the House.

Source: CNNMoney.com

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Greenspan Says Fed Did Not Fuel The Housing Bubble

Thusday, March 18, 2010

Greenspan did offer somewhat of a mea culpa, though, noting that the regulatory system failed by not demanding financial firms hold much larger capital buffers.

Greenspan, who led the U.S. central bank from 1987 to 2006, has been criticized by some analysts who argue he kept short-term, benchmark interest rates too low for too long in the early 2000s.

The former Fed chief defended the central bank's actions, saying that the seeds of the housing boom were sown by geopolitical events that were out of the Fed's control, an argument he has presented a number of times in the past.

The fall of the Soviet Union led to hundreds of millions of workers entering the global marketplace, he said in a paper to be presented to a Brookings Institution conference.

This new market-based workforce, Greenspan said, helped push up growth in the developing world. This in turn fueled a global savings glut that drove down long-term interest rates, leading to an "unsustainable boom" in house prices, he said.

That housing boom, Greenspan stressed, was not a phenomenon in the United States alone with 20 other countries also witnessing huge run-ups in home values.

While he acknowledged that markets and regulators misread the risk embedded in the complex financial products that triggered the crisis, he said no regulator can be expected to consistently forecast if a specific product will turn toxic.

A better approach, he said, would be higher capital buffers.

" Capital and liquidity, in my experience, address almost all of the financial regulatory structure short-comings exposed by the onset of crisis," Greenspan said.

" Adequate capital eliminates the need for an unachievable specificity in regulatory fine-tuning."

Greenspan also endorsed the idea of contingent capital, or debt that converts to equity in times of distress. He said this could reverse moral hazard, the expectation of bankers and traders that the government will bail them out if their bets go awry.

Lawmakers are currently working on the most sweeping overhaul of bank and capital market oversight since the 1930s. The reform will likely involve the Fed being tasked with regulating large, interconnected firms whose failure would pose a risk to the entire financial system.

Greenspan, who was known for his light-touch approach to regulation during his tenure as Fed chairman, said that the idea that a systemic risk regulator can spot risks in a timely manner is likely untenable.

" The notion of an effective systemic regulator as part of the regulatory reform package is ill-advised," Greenspan said.

" Forecasters as a group will almost certainly miss the onset of the next financial crisis, as they have so often in the past and I presume any newly designated systemic risk regulator will also."

Source: Yahoo News

Single-Family Starts Hold Firm In February

Tuesday, March 16, 2010

The pace of single-family home production remained virtually unchanged in February, with a 0.6 percent decline to a seasonally adjusted annual rate of 499,000 units, according to figures released today by the U.S. Commerce Department. Meanwhile, a large decline on the more volatile multifamily side brought the overall number of housing starts down 5.9 percent to a seasonally adjusted annual rate of 575,000 units.

"Today's single-family numbers are fairly encouraging, in that the level of building activity held firm even as large portions of the country experienced abnormal weather conditions," noted Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich.

"This latest data indicates that the single-family sector is gradually finding more stable ground, particularly in light of the poor weather conditions that hampered new building activity in two out of four regions last month and the continued difficulties that builders faced in accessing financing for new projects," said NAHB Chief Economist David Crowe. "With the deadline for purchasers to take advantage of home buyer tax credits fast approaching at the end of April, improvement in single-family building activity was expected and may have continued into early March. Moreover, the very thin inventory of new homes now on the market, the pent-up demand from three-plus years of low household formations and good affordability conditions will provide the platform for a 25 percent gain in new-home construction in 2010 over 2009."

Source: NAHB

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Mortgage Delinquencies at Historic Highs

Monday, March 15, 2010

The state of the housing market has long reached a point where it's good news to hear, "It's not getting worse." Unfortunately, according to a firm that tracks borrowers behind on their mortgages, you can conclude at best, "It's getting worse, but less quickly."

Rising sales, largely spurred by first-time buyer credits, have given people hope that the beleaguered housing market has finally hit bottom and is even showing signs of life. It's been impossible, however, for me to get excited about this, considering that the number of people falling behind on their loan payments is growing, not shrinking. Unemployment continues to produce new delinquencies, and it's been many quarters now since we were talking only about subprime mortgages. No, delinquencies are hitting regular old fixed-rate mortgages to borrowers with good credit, too.

And here's the latest report from Lender Processing Services out of Jacksonville, Fla.: Delinquency rates have hit historic highs. More than 7.4 million home loans nationwide are in some stage of delinquency or foreclosure, with another 1 million properties either bank-owned or sold out of foreclosure. An incredible 10% of all U.S. loans are delinquent.

The worst-hit areas are the usual suspects: the boom-and-bust states of Florida, Nevada, Arizona, California, plus the economically savaged areas of Michigan and Ohio. Also up there are Mississippi, Georgia, Indiana and Illinois. But few states are escaping the problem; it's just that the worst states are so, so bad it makes the others look relatively good.

LPS says, "The pace of deterioration has slowed." That's the supposed good news. But I have a hard time thinking optimistically about this, not just because in January alone 346,000 borrowers fell behind on their payments for the first time. The other disturbing statistic is that older loans make up a higher percentage of new delinquencies — that means people who already had fallen behind and pulled themselves out of it (maybe through a loan modification program) are delinquent again. This confirms what many have said about the federal programs to reshape mortgages into loans people can actually pay: They're not doing the job for enough people.

The sheer number of bad loans surely means more foreclosures, which means more houses on the market being sold at bargain-basement prices. And that means we'll watch our property values continue going down, down, down.

Source: CNN Money

Foreclosures Weigh on Builder Confidence in March

Monday. March 15, 2010

Builder confidence in the market for newly built, single-family homes fell back two points to 15 in March as poor weather conditions and distressed property sales posed increasing challenges to both builders and buyers, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.

"Unusually poor weather conditions certainly had a negative effect on builders' business in February," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "At the same time, the continual flow of distressed properties priced below the cost of production is having an adverse effect on new-home appraisals and also making it tough for builders' customers to sell their existing homes."

"The lack of available credit for new projects, the large number of distressed properties for sale and the continuing hesitancy of potential buyers due to the weak job market are definitely weighing on builder confidence at this time," said NAHB Chief Economist David Crowe. "That said, the inventory of new homes on the market is at an extremely low level, and we do expect a 25 percent improvement in new-home construction in 2010 over 2009 to rebuild inventory and meet expected pent-up demand."

Source: NAHB

Mortgage Rates Remain Below 5 Percent

Thursday, March 11, 2010

Mortgage rates held below the 5 percent threshold for the second straight week, a report said Thursday, weeks before a government program that has been keeping rates low is scheduled to expire.

The average rate on a 30-year fixed rate mortgage was 4.95 percent this week, down from 4.97 percent a week earlier, mortgage finance company Freddie Mac said.

Rates dropped to a record low of 4.71 percent in December and have hovered around 5 percent since, kept down by a Federal Reserve campaign to stabilize the housing market by lowering mortgage rates.

The central bank's $1.25 trillion program to buy up mortgage securities issued by Freddie Mac and sibling companiy Fannie Mae is set to expire March 31. But the Fed has held the door open to extending the program if the economy weakens.

Some analysts argue that rates could rise once the Fed's program ends, hurting both the recovery in housing and the overall economy. But government officials are optimistic that the Fed will be able to end its program without a major disruption.

Source: Associated Press

Foreclosures Leveling Off

Thursday, March 11, 2010

The national foreclosure rate fell 2% in February from a month earlier, according to an industry report released Thursday, the latest sign that the pace of foreclosures is slowing.

In January, the foreclosure rate had fallen 10% from December, according to RealtyTrac. And though foreclosures were up 6% in February from a year earlier, even that marks the smallest jump since RealtyTrac began calculating year-over-year increases in January 2006.

Still, RealtyTrac CEO James Saccacio cautioned against calling an end to the foreclosure crisis, citing several factors that could be masking underlying weakness.

" This leveling of the foreclosure trend is not necessarily evidence that fewer homeowners are in distress and at risk for foreclosure, but rather that foreclosure prevention programs, legislation and other processing delays are in effect capping monthly foreclosure activity -- albeit at a historically high level," he said.

Lenders create the processing delays by not putting borrowers in default as soon as they fall behind on their payments. Instead, they evaluate their situations to decide whether they can benefit from the Obama administration's mortgage modification program.

That means many distressed mortgages are not counted in RealtyTrac's report; its numbers may be artificially depressed.

Also keeping a lid on foreclosures in February was foul weather, with heavy snow storms leading to court closings.

" If the county clerk's office is dark, it affects our numbers," said RealtyTrac's spokesman Rick Sharga.

It's possible that March will see a resurgence of foreclosure numbers. "We saw the same thing last January and February," said Sharga, "then, all hell broke loose in March."

Source: CNNMoney.com

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Unemployment Claims Show Long-Term Problem

Thursday, March 11, 2010

The number of Americans filing continuing claims for unemployment insurance spiked last week, the Labor Department said Thursday, as sluggish hiring continues to drag on the labor market's recovery.

The number of people filing continuing claims jumped to 4,558,000 in the week ended Feb. 27, the most recent data available. That was up 37,000 from the preceding week's upwardly revised 4,521,000 claims.

Economists were expecting continuing claims to remain unchanged at 4,500,000.

Continuing claims reflect people filing each week after their initial benefit week until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved into state or federal extensions, or people whose benefits have expired.

" Continuing claims represent the pool of workers who have been unable to get back into the labor market quickly," said Robert Dye, senior economist at PNC Financial Services Group. "Long-term unemployment remains a significant problem and will remain a drag on the economy, as it has for some time now."

Dye said the reluctance of small businesses to commit to hiring adds substantial pressure to a jobs recovery.

" The climate for hiring is highly uncertain at small businesses, with health care legislation still pending and tax policies in flux," he said. "I think it will take months before we see hiring there."
Wells Fargo senior economist Mark Vitner added that the sharp increase in continuing claims in the latest data could also be because severe winter weather hindered employers from hiring.

Source: CNNMoney.com

Osmose Receives U.S. Patent for MicroPro® Technology

Wednesday, March 10, 2010

Osmose, Inc., the premier supplier of wood preservative technologies, is pleased to announce that on March 9th the United States Patent and Trademark Office issued a patent (United States Patent No. 7,674,481) for our micronized copper technology for wood preservation. This new Osmose patent involves a method for treating wood with different aqueous compositions of particles of copper compounds such as: copper carbonate, basic copper carbonate, or copper hydroxide. The original patent application was filed in 2003 and has been extensively examined in the United States Patent and Trademark Office. Related micronized patent applications have been examined and granted internationally.

Wood products treated with the Osmose MicroPro technology are sold in over 5,000 lumberyards and home centers in the United States. The MicroPro treated wood process is Environmentally Preferable Product (EPP) certified and has earned Green Approved Product certification from the National Association of Home Builders (NAHB) Research Center. MicroPro treated wood products are also being produced in Europe and sold worldwide. Osmose will continue to build on its micronized technology and has filed additional patent applications both in the U.S. and in other countries broadly covering the concept of treating wood with micronized particles.

Wood Advocates Aim To Blunt Composites, PVC Growth

Tuesday, March 9, 2009

Three wood-producing groups are stepping up joint and individual efforts this spring to promote natural wood decks and, they hope, stop market share increases by composite and PVC products.
" As we see the economy turning around, we want to see redwood be top of mind" among buyers, said Bob Mion, director of marketing for the California Redwood Association, expressing a view shared by advocates of Southern Pine and Western Red Cedar.

For the past year, trade groups for these three wood types have jointly sponsored the Real Outdoor Living website containing videos and brochures touting wood decks, and they jointly sponsored a press event in January at the International Builders' Show in Las Vegas. Now the site is slated to get an upgrade next month with the addition of new videos targeting building material dealers that will promote all types of wood decks.

Wood accounted for 84% of the board feet of material used to create decks in the United States in 2008, the Freedonia Group estimates. Traditionally, decks for new homes were made of wood, while composite and PVC decking was more popular as a replacement product and on upscale homes. But there are indications that trend may change.

By 2013, Freedonia predicts woods' market share will fall to 77%, while composite products' share will increase to 19.3% from 13.8% and plastic/PVC goods will account for 3.7%, up from 2.6%. Principia Partners, another consulting group that prefers to measure the market in dollar terms, says composites and plastics figured in roughly 26% of the dollars expended for decking last year, and it expects that share to hold steady in 2010, then rise later.

Such increases are making dealers and producers of natural wood products nervous. After years of being able to cite composites' and plastics' relative lack of good looks and durability, the gap between them and real wood is narrowing. Meanwhile, consumer trends toward maintenance-free living have put wood advocates on the defensive, and so they're fighting back.

Steve Crook owner of General Woodcraft Inc. in New London, Conn., did so with an opinion column on ProSales' website that in effect dismisses composites, plastics, and even treated wood as optimal decking materials in favor of the tropical hardwood that his company sells.

Meanwhile, the Canadian-based Western Red Cedar Lumber Association (WRCLA) is playing up its product's environmental qualities by publishing an assessment of cedar's environmental benefits over its life cycle. WRCLA also is promoting itself heavily to residential architects.

Mion said the California Redwood Association plans to update its website next month with a stronger emphasis on redwood's green virtues. And while the association promotes a consumer message, individual members are reaching out to their dealers, he said.

Advocates for Southern Pine have several closely related organizations on their side, including the Southern Forest Products Association, the Southern Pine Council, and SPAN--the Southern Pine Awareness Network. Pine's champions have taken a leading role in the Real Outdoor Living campaign, managed the creation of videos, and plan to issue sell sheets extolling the virtues of wood.

Source: ProSales Magazine

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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 Help for Unemployed, Underwater Borrowers

Friday, February 19, 2010

Under pressure to do more for troubled homeowners, President Obama is expected to announce on Friday a $1.5 billion program to help borrowers in the five states hit hardest by the housing crisis.

The initiative calls for pumping money into state housing agencies in California, Arizona, Nevada, Florida and Michigan to fund programs to prevent foreclosure for people who are unemployed or who owe more than their homes are worth.

Also, the agencies can assist homeowners having trouble securing loan modifications because of second liens, as well as promote affordable housing opportunities.

Obama is scheduled to unveil the initiative, which will be funded with money from the TARP bank bailout, at events in Nevada, which has the highest number of underwater homeowners at 65% and the nation's second-highest unemployment rate at 13%.

The president will be joined by Senate Majority Leader Harry Reid, D-Nev., who is facing a tough relection campaign.

The funds will be allocated based on a formula that takes into account home price declines and unemployment. The agencies' programs must be approved by the Treasury Department.

The move is the administration's latest attempt to fix its signature foreclosure-prevention effort, the Home Affordable Modification Program, which has been widely panned for not doing enough.

The year-old initiative, which lowers qualified borrowers' monthly payments to no more than 31% of pre-tax income, has placed more than one million people in trial modifications. But it has given lasting help to only 116,000 homeowners, mainly by lowering their interest rates.

Source: CNNMoney.com

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

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