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11-29-2007, 02:20 PM
Post: #11
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CONSUMER CONFIDENCE DROPS EIGHT POINTS
Pessimism driven by the housing downturn, coupled with rising gasoline and oil prices, knocked consumer confidence levels down eight points in November to 87.3, according the Conference Board's Consumer Confidence Index based on a sampling of 5,000 U.S. households. "Consumers' apprehension about the short-term outlook is being fueled by volatility in financial markets, rising prices at the pump, and the likelihood of larger home heating bills this winter," said Lynn Franco, director of The Conference Board Consumer Research Center. ![[Image: Space40px.gif]](http://mailer.carwebs.org/news/Images/Page/Space40px.gif)
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03-19-2008, 01:11 PM
Post: #12
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Gov't Eases Fannie, Freddie Restraints
Wednesday March 19, 12:10 pm ET By Marcy Gordon, AP Business Writer Government Enacts Plan to Ease Capital Restraints on Fannie, Freddie; Goal Is $200B Infusion WASHINGTON (AP) -- The government on Wednesday relaxed capital requirements at Fannie Mae and Freddie Mac as part of a plan to quickly inject an additional $200 billion of financing for home loans. The initiative, which will require Fannie and Freddie to raise substantial funds, is part of a broader government strategy to ease a credit crisis that has made it difficult for consumers and businesses to borrow, and spread fear throughout global financial markets. The Office of Federal Housing Enterprise Oversight, which oversees the government-sponsored companies, said the mandatory cash cushion for Fannie and Freddie -- now nearly $20 billion for the two -- will be reduced by a third under the new plan. The goal is to free-up money to help new home buyers take out loans and to help existing home owners refinance into more affordable mortgages. The capital requirement for each company will be reduced from the current 30 percent to 20 percent, and further reductions will be considered by the regulator in the future. Fannie and Freddie will likely raise billions of dollars through special sales of stock. "Fannie Mae and Freddie Mac have played a very important and beneficial role in the mortgage markets over the last year," OFHEO Director James B. Lockhart said at a news conference. "We believe they can play an even more positive role in providing the stability and liquidity the markets need right now." The companies' shares were buoyed by news of the agreement. Fannie stock jumped $2.64, or 9.4 percent, to $30.86 in late morning trading, while Freddie shares advanced $2.98, or 11.4 percent, to $29. The companies' shares have plummeted to fresh 52-week lows in recent weeks amid concern over their ability to find buyers for their mortgage-linked securities amid plunging home prices and rising foreclosures. The new agreement was the third step the government has taken in recent weeks to allow Washington-based Fannie and McLean, Va.-based Freddie to shoulder larger burdens in the mortgage market despite their multibillion-dollar fourth-quarter losses and expectations of further red ink this year. The $168 billion economic stimulus package enacted last month included a temporary increase in the cap on mortgages that the companies can purchase or guarantee, from $417,000 to $729,750 in high-cost markets. And, as a reward for filing timely financial statements following multibillion-dollar accounting scandals, Fannie and Freddie were freed on March 1 of a combined $1.5 trillion cap on their mortgage-investment holdings. OFHEO estimated that the combination of these efforts should allow Fannie and Freddie to purchase or guarantee roughly $2 trillion in mortgages this year. The two companies together hold or guarantee around $4.9 trillion in home-loan debt. As the mortgage crisis and ensuing credit crunch have worsened in recent months, policy makers have increasingly looked to them to step up their participation in the hobbled market for securities backed by mortgages. "This is what (Fannie and Freddie) were put in place for. ... And we will deliver," Freddie Mac Chairman and CEO Richard Syron said. Influential Democratic lawmakers have been pushing for a reduction in the companies' capital-holding requirements. Bush administration officials and numerous Republican lawmakers, on the other hand, have long opposed allowing Fannie and Freddie to take on more debt, contending that doing so could threaten the global financial system. |
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03-19-2008, 04:03 PM
Post: #13
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Playing the Housing Slump: Is It Time to Make Your Move?
by Jonathan Clements Saturday, March 15, 2008 Provided by: The Wall Street Journal Financial lore says you should buy when there's blood in the street -- which suggests real estate is a bargain, because there's blood all over the neighborhood. Time to invest? I wouldn't be surprised to see home prices drop sharply this spring, as long-suffering sellers in hard-hit areas throw in the towel and slash their asking price. That could spell opportunity for this year's buyers. But what if you already own a home -- and have no desire to become a landlord? Here are three ways to play today's battered housing market Trading up. If you're hankering after a larger home or a house in a better neighborhood, this could be your chance to trade up on the cheap. To be sure, when you go to sell your current home, you will likely get a modest price. Since 2006's second quarter, real estate has fallen 10.2%, as measured by the S&P/Case-Shiller U.S. National Home Price Index. But your new, grander house will also be relatively inexpensive, so you're effectively cranking up your real-estate exposure when the market is well below its peak. That said, I wouldn't think of this move as an investment. Your new home will probably mean not only a bigger mortgage, but also higher ongoing costs, including homeowner's insurance, property taxes and maintenance expenses. These ongoing costs will offset a large chunk of any future home-price appreciation. In other words, trading up to a larger home or a better neighborhood is really about wanting to consume more real estate. Still, like any thrifty shopper, you want to buy when there's a sale -- and that is what today's market offers. "It's like going from a Honda to a Mercedes," says Charles Farrell, a financial adviser with Denver's Northstar Investment Advisors. "It's a lifestyle choice. As long as it doesn't cut into your ability to accumulate capital for retirement, this is probably a pretty good time to upgrade." Doubling down. Instead of trading up, you might be eyeing a vacation home. If you don't plan to rent the place out, the same logic applies: Once you subtract the annual costs from the price appreciation, you likely won't make very much money -- which means the property won't be much of an investment. On the other hand, maybe you're two or three years from retirement and are toying with buying a second home that could become your sole residence once you quit the work force. Does it make sense to purchase now, given the decline in home prices? Buying today is no doubt appealing, because it'll give you a chance to vacation in your future home. But whether it turns out to be a wise financial move depends on what happens to property prices -- and that's tough to predict. Still, I wouldn't bank on a rapid bounce back in home prices. At the current sales pace, it would take a whopping 10.3 months to clear January's backlog of unsold homes. By contrast, in January 2005, the supply of unsold homes was at a mere 3.6 months, according to the National Association of Realtors. The bottom line: If you think you'll get a lot of use from a second home, go ahead and buy. But if you view the purchase as a bet on rising home prices, I would hold off for now. Helping hand. While buying more real estate for your own use probably won't be a great investment, you could help your adult children make good money -- by transforming them from renters to homeowners. To that end, you might give your kids an advance on their eventual inheritance, so they have enough money to make a down payment. Yes, that means they will start to incur the housing costs I mentioned above, including property taxes and maintenance expenses. But your children will also replace their monthly rent check with a monthly mortgage check, and that will allow them to start building home equity. "If you have kids who are first-time buyers in markets that are relatively depressed, this could be a good time," Mr. Farrell reckons. "These days, they might need to make a 10% down payment. You could make a gift to them of the down payment or make a loan to them." Copyrighted, Dow Jones & Company, Inc. All rights reserved |
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03-25-2008, 12:10 PM
Post: #14
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US Home Prices Drop in January
Tuesday March 25, 11:57 am ET By Vinnee Tong, AP Business Writer S&P Says Home Prices Fall by Record 10.7 Percent in January NEW YORK (AP) -- Home prices in many cities continued to plunge by record levels in January as sellers cut their asking bids and rising foreclosures took their toll, new data showed Tuesday. While the spring selling season usually gives the market a bounce, some analysts say any notable improvement may not come until well into the summer. U.S. home prices fell 10.7 percent in January, and the Standard & Poor's/Case-Shiller home price index of 20 cities saw the steepest decline in the index's two-decade history. Worst-hit were Las Vegas and Miami, both reporting 19.3 percent drops, as the regions are still paying the price for rampant speculation and overbuilding during the boom years. Those cities and 14 others, including Phoenix, San Diego, and Detroit, posted record lows. "I wouldn't be looking for a pattern of improvement until April, May or June," said Brian Bethune, Global Insight's chief U.S. economist. Only Charlotte, N.C., squeaked by as a gainer in the Case-Shiller index, with a 1.8 percent rise in January compared to a year earlier. "We are still selling here in Charlotte," said Dianne McKnight, a broker associate at Re/Max Executive Realty in the city. "If a property is priced right, it sells in a day and you have multiple offers. There are plenty of buyers out there kicking around." But the overall downbeat figures come on the heels of data released Monday showing that the median price of existing homes being sold in February fell in the largest year-over-year drop since at least 1999. "Home prices continue to fall, decelerate and reach record lows across the nation," said David Blitzer, index committee chairman at S&P. "No markets seem to be completely immune from the housing crisis." Blitzer said all 20 cities S&P tracks have seen falling prices for five consecutive months when compared to the prior month. What's more, the declines are growing in severity, with 13 of the 20 cities reporting their biggest single monthly decline in January. Pava Leyrer, president of Heritage National Mortgage in Detroit, said the tightening of loan standards has compounded the problems of too much inventory, foreclosures and worries over the economy. "It's just a spiral that will end up taking this year to get out of," Leyrer said. She said it would take until the spring of 2009 before they started to see the market in Michigan improve. While the vast majority of homes in the U.S. are not in danger of foreclosure, the housing slump has raised concerns about a recession and has had ripple effects across the economy as consumers spend less in other areas and banks tighten lending requirements. Consumer confidence sank to a five-year low in March as tight credit markets, rising prices and worsening job prospects deepened worries that the economy has fallen into recession. The Fed has aggressively slashed interest rates to spur growth and free up the credit markets. A narrower survey, released separately Tuesday by the Federal Housing Enterprise Oversight said home prices fell 3 percent in January from the same month last year, and dipped 1.1 percent from December. The declines were sharpest in New England. The monthly OFHEO index is down 4.1 percent since its peak last April. The index is calculated using mortgages of $417,000 or less that are bought or backed by government-sponsored mortgage companies Fannie Mae or Freddie Mac. Legislation enacted in February temporarily raised the limit to as much as $729,750 in high-cost areas. Many sellers in some parts of the country seem to be cutting prices more aggressively. While sales of existing homes notched a surprise increase in February after falling for six straight months, the median price fell, according to data Monday from the National Association of Realtors. The trade group said sales rose 2.9 percent last month to a seasonally adjusted annual rate of 5.03 million units -- the biggest increase in a year. But the median existing sales price in February fell to $195,900, the largest year-over-year drop on records that go back to 1999. AP Business Writer Dan Caterinicchia in Washington, D.C. contributed to this report. |
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03-25-2008, 01:52 PM
Post: #15
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2Real4me! Wrote:US Home Prices Drop in January The above bold quote was taken from the economy topic. The other quote was taken from the real estate topic. I find it hilarious that even S & P offers different statistics for the same period of time. Folks...believe half of what you see and none of what you hear. Also, I sopke with a real estate agent yesterday, and he kept saying that home values aren't going to go down much more. haha He told me that extraordinarilyinflatedoil prices anddown in the dumpsconsumer confidence had absolutely nothing to do with home values decreasing. Ok..... 7 years ago a house could be had for say 250,000 in Whittier...or less. At the end of 7 years, those samehomes were selling for up to750,000. That isn't normal and everyone was saying...mainly realtors, that the prices were never coming back down. Buy now...quick hurry. Seems to be a case of realtors trying to prolong the high prices to get the high commissions. Now look. One area in Whittier in the 90604 zip code has houses that were at 650,000 now selling for 400,000 or less. That is a nice correction. Maybe in one more year the rest of us "normal people" will be able to afford that house which we thought was out of our grasp. Thank goodness we didn't listen to a realtor and buy high..."because the prices will never come down again, this is the future....hurry hurry." Disclaimer: Not all real estate agents are like that. Some are realistic. |
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03-26-2008, 11:49 AM
Post: #16
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IV Wrote:Thanks...2Real4me! Wrote:US Home Prices Drop in January 
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03-26-2008, 11:50 AM
Post: #17
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New Home Sales Fall, Factory Orders Drop
Wednesday March 26, 12:46 pm ET By Martin Crutsinger, AP Economics Writer New Home Sales Fall to a 13-Year Low, Underscoring Housing's Steep Slump; Factory Orders Fall WASHINGTON (AP) -- Sales of new homes fell in February for the fourth straight month, pushing activity down to a 13-year low as the steep slump in housing continued. The Commerce Department reported Wednesday that new home sales dropped 1.8 percent last month to a seasonally adjusted annual rate of 590,000 units, the slowest sales pace since February 1995. The decline was slightly worse than expected. The median price of a home sold last month dropped to $244,100, down 2.7 percent from the level of a year ago. The prolonged slump in housing has dragged down overall economic activity. Many analysts believe the slump could combine with a multitude of other problems including a severe credit crunch, soaring energy prices and plunging consumer confidence, to push the country into a full-blown recession. The number of unsold homes on the market at the end of the month represented a 9.8 months' supply at the February sales pace, the same as in January. That was the highest inventory level in more than 26 years and reflects the fact that increased numbers of mortgage foreclosures are dumping even more homes on an already glutted market. Sales dropped the most in the Northeast, falling by 40.6 percent. Sales were also down in the Midwest, dropping by 6.4 percent, but posted gains in the South of 5.7 percent and 0.7 percent in the West. Many analysts believe that the slump in housing, which began in 2006, could last into 2009. It was reported on Tuesday that the Standard & Poor's/Case-Shiller index of home prices fell nearly 11 percent in January from a year ago, the biggest year-over-year decline in the history of the index. Analysts said that housing is being hurt currently by tighter lending conditions as banks react to soaring mortgage defaults and the reluctance of prospective buyers to make a decision, fearing that prices have further to fall. In other economic news, orders to factories for big-ticket manufactured goods fell 1.7 percent in February, a second consecutive decline and further evidence of the economic troubles gripping the country. The declines in orders for durable goods, items expected to last at least three years, showed up in a number of areas. Demand for manufacturing equipment plunged by 13.3 percent, the largest amount on record, while orders for nondefense capital goods excluding aircraft, the category that is seen as a good proxy for business investment, fell by 2.6 percent, the biggest decline in four months. Economic growth slowed to a barely discernible 0.6 percent in the final three months of last year, and many economists believe the gross domestic product will turn negative in the current quarter, signaling the start of a recession. The 1.7 percent drop in orders for durable goods, items expected to last at least three years, was worse than the 1 percent increase that many economists had expected. The weakness came even though orders for transportation equipment rebounded with a 0.6 percent rise in February after a big 12.6 percent plunge in January. The swing in both months reflected changes in demand for commercial aircraft, which rose 5.4 percent in February following a 30.2 percent plunge in January. Orders for motor vehicles fell by 2.7 percent in February as U.S. automakers continued to face weak demand, reflecting the weak economy and soaring energy prices. Excluding transportation, orders fell by 2.6 percent in February, representing the fourth decline in the past five months. Economists believe that if the country does slip into a recession, the downturn may not be as severe in manufacturing, which is being helped by continued strong growth overseas, which is bolstering U.S. exports. |
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03-26-2008, 12:34 PM
Post: #18
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IV Wrote:2Real4me! Wrote:US Home Prices Drop in January Any Realtor that tells you that the market is at its low is lieing... Just tell them to read or watch the news. When I got into real estate, I was told and taughtby the oldies of the business that you always read and keep up with the news on whats going on in because it effects our businesses. I took their messages as very good advice since they've been in business when I was in diapers. They've seenthe real estate market in stages that are never the same, so itmeans you always need to stay focused. |
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03-28-2008, 11:46 AM
Post: #19
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CNBC
Housing Chief: Freezing Mortgages a Mistake Friday March 28, 11:19 am ET There are signs of improvement in US housing markets but the idea of freezing mortgage rates would be a mistake, the director of the Office of Federal Housing Enterprise Oversight said Friday. "You'd really cause market dislocations," said OFHEO director James Lockhart on CNBC, when asked about a proposal put forward by Sen. Hillary Clinton, a contender for the Democratic presidential nomination. (See more comments here). "I think we're going to let the market work and interest rates have come down dramatically and people are going to be able to refinance," Lockhart said. He said lower interest rates should make it somewhat less painful for holders of adjustable-rate mortgages who face "resets" to higher rates in coming months. Lockhart said there were "some good signs" that the severe downturn in housing markets might be approaching an end, although he said it will take some months to be sure. "It's going to take a while but we're starting to see some bottoms," Lockhart said, referring to a prolonged dip in construction starts on new homes. "It may take another six months or so but hopefully we'll start pulling out of it." He said that government-sponsored enterprises Fannie Mae and Freddie Mac were taking steps that should help keep mortgage rates lower. Regulators eased capital requirements for the two biggest mortgage finance sources so they can provide more funds for stressed mortgage markets. Fannie (NYSE:FNM - News) and Freddie (NYSE:FRE - News) also will be allowed to raise as much as $20 billion in capital as part of an agreement that lets them buy more debt securities. The capital may take the form of common shares, preferred shares, or convertible preferred shares, and will need to be raised "sooner rather than later," Lockhart said. "Fannie and Freddie are doing billions and billions a month refinancing people out of subprime mortgages and I think that is the way to go," Lockhart said. In response to questions, Lockhart said he supported the idea of consolidating the regulation of Wall Street investment banks and other financial market participants that have come under criticism as credit markets have come near seizing up. "I think that's a good idea," he said, adding Fannie Mae and Freddie Mac need a strong regulator as they keep growing. One reason they need to be strongly regulated is to prevent the possibility that, should they get in trouble, they could cause problems for the whole financial system. "Systemic risk is a big issue with these two companies. When you have 76 percent market share in just two companies, obviously they are the system," Lockhart said, calling that "a key reason" for legislative action to tighten regulation. |
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03-28-2008, 12:20 PM
Post: #20
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I don't think we should hope the housing market stabilizes right now. It hasn't corrected itself enough yet. When the prices go back down to 180k for a 4 bedroom 2 bath near Whitwood, and I buy one.....then we can talk about markets increasing.
I wonder how all the people who kept on and on about how home prices would never fall again are feeling right about now. Guess they aren't old enough to remember the last two housing cycles. |
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