Barclays Capital predicts that home prices will not fall much more with prices then remaining virtually flat for a few years.
Don Grafues
Resource: REALTOR.org
Resource: REALTOR.org
March 9, 2010
March 5, 2010
Earned Principal Reductions
The Federal Deposit Insurance Corporation (FDIC) is considering a plan to help homeowners who are significantly underwater on their mortgage yet are current with payments. The program would offer “earned principal reduction” for an as yet to be determined period of time. If they proceed with the program it would be introduced later this year.
Don Grafues
Resource: REALTOR.org
Resource: REALTOR.org
March 3, 2010
Bailout For Fannie?
Fannie Mae is asking for another $15.3 billion from the government. Fannie’s 4th quarter loss was $16.3 billion, an improvement over the $25.2 billion loss in the 4th quarter of ’08. Fannie continues to be plagued with bad loans.
Don Grafues
Resource: REALTOR.org
Resource: REALTOR.org
March 1, 2010
New Home Sales Fall
One month does not establish a trend. However on 2/18 we published a post “New Home Construction Improving?” in which an analyst at Credit Suisse predicted 2010 would be a strong year for home builders, with certain caveats.
It may be the caveats rule. New Home sales fell 11 percent in January from the December level reaching the lowest level since 1963 according to an article at REALTOR.org.
Don Grafues
Resource: REALTOR.org
Resource: REALTOR.org
February 27, 2010
Mortgage Applications Down
Mortgage applications fell last week by 8.5 percent from the prior week. Contributing factors would have been the storms on the east coast and a slight uptick in rates.
Don Grafues
Resource: REALTOR.org
Resource: REALTOR.org
Home Values And Perpetual Motion
REALTOR.org printed an article in which Todd Zywicki, a George Mason University law professor, argues that fraud was not the culprit of the housing meltdown. And his ideas are easily understood.
A simplified version of what happed is as follows;
- From 2001 to 2004 the Fed kept interest rates very low making adjustable rate mortgages very attractive.
- While these loans turned out to be risky, at the time homebuyers were making a smart decision to take advantage of these attractive, low cost loans.
- Once the Fed began raising interest rates, the adjustable rate mortgages began adjusting making it difficult for some home owners to continue making payments and they defaulted on their mortgage.
- As foreclosures increased, prices were driven down putting more people in an “underwater” situation.
This cycle of lower home values resulting in more defaults resulting in more foreclosures became perpetual, requiring extraordinary action to break the cycle.
Don Grafues
Resource: RALTOR.org
Resource: RALTOR.org
February 25, 2010
Mother-In-Law Units Now Very Popular
A recent survey revealed that more buyers are looking for homes with “mother-in-law suites.” The economy is causing more families to consolidate and become multi-genrational families. If you are selling a home with separate living quarters from the main residence be certain to emphasize it to set yourself apart from other sellers.
Don Grafues
Resource: REALTOR.org
Resource: REALTOR.org
February 22, 2010
1.8 Million First Time Home Buyers
Mark Zandi, chief economist at Moody’s Economy.com estimates that the number of 1st time home buyers in 2010 will grow 6.4 percent over 2009 for a total of 1.84 million homes sold.
Don Grafues
Resource: REALTOR.org
Resource: REALTOR.org
February 19, 2010
New Home Construction Up
The Commerce Department reports that new home construction improved in January.
- January’s build was at an annualized rate of 591,000.
- This is up 2.8% from December’ annualized rate (revised) of 575,000.
- And up 21.1% from January’s 2009 rate of 488,000.
Don Grafues
Resource: REALTOR.org, The Wall Street Journal & CNNMoney.com
Resource: REALTOR.org, The Wall Street Journal & CNNMoney.com
February 18, 2010
New Home Construction Improving?
REALTOR.org ran a news article on the 16th with the headline “Analyst Predicts Improvement in Home Building” which appears to be positive news. But then the article goes on to list several factors that may impact the degree to which new home construction will recover.
- The tax credits will soon come to an end removing this inducement for buyers.
- Mortgage rates are expected to go up.
- More foreclosures (see yesterday’s article “Continued Pressure On Home Sales”).
- FHA has tightened their requirements (see our post “FHA Changes Rules”).
- Timing of recovery of the jobs market.
So tell me what you think; will new home construction recover? Give your opinion by clicking on “comments” below.
Don Grafues
Resource: REALTOR.org
Resource: REALTOR.org
