Many investors hoped a modest decline and a leveling off in mortgage delinquencies the end of last year signaled a top for the index, but those hopes were dashed when delinquencies for all types of mortgage hit a new high during the first quarter. Fears were further exacerbated yesterday when Lender Processing Services released their […]
Archive:
Housing Sector
The amount of new homes for sale in the U.S. reached a multi-decade low in May helping boost U.S. homebuilders. To find a point in time where fewer new homes were on the market you would have to go all the way back to the early 70’s/late 60’s (see chart). While the sales pace of […]
Not since June 2008 has the housing sector been completely devoid of some form of tax incentive to help bolster sales, until now that is and it shows. MBA purchase applications have taken a precipitous drop over the past two weeks falling to levels not seen since the end of 1997. The government’s approach of […]
Now that the extended first time home buyer credit is history, so is whatever impact it once had on home sales. The good news is that data indicates the extended program had only a modest impact, especially compared to the original incentive; this however is also the bad news. A recent, albeit modest, jump in home sales […]
As expected mortgage rates have begun to climb. On March 31st, as planned the Fed terminated its mortgage backed securities (MBS) purchase program after buying $1.25trn of the instruments–keeping mortgage rates artificially low. According to the Mortgage Bankers Association (MBA), the average rate for a 30Y mortgage already climbed to 5.31% the week ending 4/2, compared to […]
What a day, I wake up to the news that Fitch has downgraded Portugal, leading to a strong sell-off in Euro–reaching a ten month low against the dollar. This news was not tremendously surprising, and I expect the situation in Europe will get far worse before getting better, especially if Greece doesn’t find a funding […]
Pending home sales, generally considered a good leading indicator for final home sales fell -7.6% in January, supporting recent weakness in both existing and new home sales. This result was well below the consensus forecast calling for a monthly increment of 1.8%. This data reiterates my view that that the housing recovery will face significant headwinds over the […]
The chart below illustrates how existing home sales appear to be pulling back to levels that would have been expected without a surge in demand stemming from the first time home buyer tax credit, despite the programs extension/expansion. This could be an indication that housing demand was mostly sopped up by the original tax credit, […]
This morning’s disappointing new home sales release for January reiterates the trend I outlined in my piece published on Real Money this morning titled ‘Housing Recovery Starts to Buckle’. I continue to believe housing will face a number of hurdles this year, and is unlikely to enjoy anything more than a modest, though bumpy, recovery.
January’s record low new home sales data has made it fairly obvious the government’s extended/expanded home buyer tax credit has yet to have a significant impact on the sector. The pace of new home sales plummeted by 11.2% to a level of 309K in January. The months supply of new homes rose sharply reaching 9.1 […]