Wednesday, February 27, 2008

January New Home Sales Fall Below 600K (SAAR)

According to the Census Bureau report, New Home Sales in January were at a seasonally adjusted annual rate of 588 thousand. Sales for December were essentially unchanged.
Sales of new one-family houses in January 2008 were at a seasonally adjusted annual rate of 588,000 ... This is 2.8 percent below the revised December rate of 605,000 and is 33.9 percent below the January 2007 estimate of 890,000.
New Home Sales
The seasonally adjusted estimate of new houses for sale at the end of January was 482,000.
The 482,000 units of inventory is slightly below the levels of the last year.

Inventory numbers from the Census Bureau do not include cancellations - and cancellations are once again at record levels. Actual New Home inventories are probably much higher than reported - my estimate is about 100K higher.
New Home Sales Inventory
This represents a supply of 9.9 months at the current sales rate.

This is another VERY weak report for New Home sales. More later today on New Home Sales.
New Home Sales Months of Inventory
 blog it

S&P Case-Shiller: Prices Fall Sharply in Q4 2007

S&P Case-Shiller reported that house prices fell sharply in Q4 2007.
The first graph shows the Case-Shiller index since 1987. The index fell to 170.64 in Q4, from 180.31 in Q3. A decline of 5.3%, or over 20% at an annual rate.
Case Shiller House Price Index
This is the lowest level for the index since Q1 2005.
The second graph shows the year-over-year change in the Case-Shiller index.

Prices fell 8.9% in 2007 according to Case-Shiller.
Case Shiller House Price Index YoY Change
The index is off 10.2% from the peak.
blog it

Friday, February 15, 2008

Pushing on a string

Ben Bernanke has cut interest rates a lot since last summer. But can he make a difference? Or is he just, as the old line has it, pushing on a string?
Here’s the Fed funds target rate (red line) — which is what the Fed actually controls — versus the interest rate on Baa corporate bonds (blue line), which is probably a better guide to what matters for actual business spending.
It’s pretty grim. Basically, deteriorating credit conditions have offset everything the Fed has done. Doubleplus ungood.
INSERT DESCRIPTION
 blog it

Tuesday, February 12, 2008

Rise in Foreclosures Leads to New Rescue Plan, Possibility for Bargains

clipped from blogs.wsj.com
At least 1.3 million mortgages were either seriously delinquent or in foreclosure at the end of the third quarter, according to the Mortgage Banking Industry. Enter the mortgage lenders. At 11:15 a.m. today six major lenders are due to announce a stepped-up effort to rescue homeowners on the brink of foreclosure. (Here’s the full story in today’s Journal.)
foreclosure data

blog it



Lenders Step Up Effort to Avert Foreclosures
By DAMIAN PALETTA and JAMES R. HAGERTY
February 12, 2008; Page A3

Prodded by the Bush administration, six major mortgage lenders are due to announce today a stepped-up effort to rescue homeowners on the brink of foreclosure.

Under the latest plan, dubbed Project Lifeline, the lenders promise to seek contact with homeowners who are 90 or more days overdue on their mortgages. In some cases, homeowners will be given the chance to "pause" their foreclosure for 30 days while lenders try to work out a way to make the loans affordable. Lenders could begin sending letters to these borrowers as soon as this week.

Homeowners wouldn't qualify for the program if they are in bankruptcy, if they already have a foreclosure date within 30 days or if the loan was for an investment or vacant property.

Unlike the plan announced in December to freeze interest rates at current levels on certain adjustable-rate loans, this latest effort is to involve all kinds of home loans, not just subprime mortgages, a higher-cost variety for people with blemished credit records or high debt in relation to income.

The participating banks, which service about half of the U.S. mortgage market, are Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., J.P. Morgan Chase & Co., Washington Mutual Inc. and Wells Fargo & Co. -- all members of the so-called Hope Now Alliance. They are working with the U.S. Treasury and Department of Housing and Urban Development. Those two departments scheduled a briefing on the plan for 11:15 a.m. today. The plan was reported yesterday by the Reuters News Service.

Almost immediately after the Bush administration announced the freeze plan in December for certain subprime borrowers, Treasury Secretary Henry Paulson indicated an interest in developing a strategy to address a broader range of distressed homeowners.

At least 1.3 million home-mortgage loans were either seriously delinquent or in foreclosure at the end of the third quarter, according to the Mortgage Bankers Association. Not all of those loans would qualify for the program, however.

Analysts at the investment-banking firm Lehman Brothers recently estimated that the number of foreclosures will surge to one million this year and next, about four times the 2007 level.

Some nonprofit groups that work with troubled borrowers say lenders have become more flexible in recent months in efforts to find ways for more borrowers to keep their homes. But they also say the industry needs to do more.

Martin Eakes, chief executive of the Center for Responsible Lending, a nonprofit research group based in Washington that frequently bashes the mortgage industry, said moves announced so far have been "baby steps." He said lenders should move more aggressively to reduce loan balances to current home values and make monthly payments affordable. He acknowledged, however, that servicers of loans -- the firms that collect payments and handle foreclosures -- face the risk of lawsuits from investors that own loans if those investors believe borrowers have been given overly generous terms.

Bruce Marks, chief executive of Neighborhood Assistance Corp. of America, a Boston-based nonprofit that works with distressed homeowners, dismissed Project Lifeline as a "PR stunt." He said it already should have been automatic for loan servicers to pause foreclosure proceedings for homeowners seeking to qualify for a more affordable loan.

Congressional Democrats also have grown increasingly hostile toward the Bush administration and lenders over the past several months, arguing that not enough is being done to prevent foreclosure. Mr. Paulson is scheduled to testify before the Senate Banking Committee Thursday, and Project Lifeline could help blunt criticism from lawmakers.

The latest initiative came as Countrywide announced a plan to work with the Association of Community Organizations for Reform Now, or Acorn, to seek alternatives to foreclosure for distressed borrowers.

Write to Damian Paletta at damian.paletta@dowjones.com1 and James R. Hagerty at bob.hagerty@wsj.com2
URL for this article:
http://online.wsj.com/article/SB120276908653960265.html

Hyperlinks in this Article:
(1) mailto:damian.paletta@dowjones.com
(2) mailto:bob.hagerty@wsj.com





Wednesday, February 06, 2008

'We are the ones we have been waiting for'

clipped from my.barackobama.com

Here's the speech Barack delivered tonight in the great city of Chicago...


blog it