Video Update: Market Movers this week: Case Shiller Index-still declining but off lows, monthly jobs report Friday…
Update 2: More on that shadow inventory courtesy of Smart Money:
(…)the outlook for housing by Amherst Securities Group, whose stuff we’ve quoted before and whose analysis is invariably first-rate. The report, dated last Wednesday, festooned with gory detail, focuses on the swollen overhang, the so-called shadow inventory, that has grown inexorably in the wake of the tsunami of default and foreclosure.
Amherst estimates this massive overhang at seven million units. That’s the equivalent of 135% of a full year’s existing-home sales and chillingly greater than the 1.27 million units that made up the overhang in early 2005, when the housing bubble had just begun its dizzying and more than a little lunatic ascent.
…Three factors are cited by Amherst as the chief culprits in this sorry narrative. The first is the rapidity with which what it describes as the nonperforming bucket (where the mortgages are at least 60 days delinquent) is filling. The second is the strikingly low “cure rate” on delinquent loans. In 2005, homeowners retrieved 66% of their loans delinquent 60 days or longer. That percentage shriveled to a paltry 5% in the second quarter of ’09.
And, finally, bloating the inventory overhang is the lengthening time between delinquency and liquidation. Of the loans in the delinquent pipeline in August 2009, 9% have not made a payment in over 24 months, compared with 4% in 2008. The reasons cited by Amherst for this stretching out include moratoriums on foreclosures and the slow pace of the judicial process in states where a judge’s O.K. is required for foreclosure...GO READ THE WHOLE EXCELLENT PIECE!
UPDATE: More on the Case Shiller Home Price Index:
- 10 & 20 city composites are up 3.6% from their lows.
These guys are hyping minimal improvement here, AGAIN. SHOCKAH! They are looking at month-to-month which is not the way to gauge, you need y/y in RE!
Here comes David Blitzer to break it out- he sees ‘clear signs it is turning up’, it ‘will be slow’ still ‘clear risk there may be backsliding at some point but it definitely looks encouraging’ Erin Burnette is ‘clinging’ to the ALMOST FLAT Y/Y for Dallas and Denver HA! Blitzer notes they include foreclosure sales and anecdotal data is foreclosures are out there, and he acknowledges the resets in 2010 are coming, and HA he finally notes the tax credit is ending in November, ya!
Here is the REAL DATA YEAR OVER YEAR from the same report – 1 YEAR CHANGE:
Dallas down 1.6%
Denver down 2.9%
Detroit down 24.6%
Las Vegas down 31.4%
L.A. down 14.9%
Miami down 21.2%
Minneapolis down 17.3%
New York down 10.3%
Phoenix down 28.5% (ouch!)
Portland down 13.9%
San Diego down 12.3%
San Francisco down 17.9%
Seattle down 15.3%
Tampa down 18.4%
Washington down 9.8%
THESE ARE NOT GOOD NUMBERS FOLKS!!!!
Here are the ridiculous tiny blips they are getting excited about, recall these are the 30 day change from June to July in %:
Atlanta up 2.3%
Boston up 1.2%
Charlotte up 0.6% (wow let’s take out some equity and restart the economy! uhm NOT!)
Continues after the break:
Housing: Making Home Affordable mortgage modification plan poll…
Aloha. Please take a second to click the poll below. A few emails have come in requesting an in-depth drilldown of details and expanded coverage of the Making Home Affordable Modification program and I have spent weeks researching for my own interests but before I dive in to more posts on the subject I want to get an idea of how many people want/need the additional info. Gracias.
Update: Market Mover Tuesday: Consumer Confidence drops; Case Shiller Index: home prices down 17% y/y; up .04% m/m, first increase in 3 years — CNBC.com
Update: Timmeh tells China we will shrink our budget deficit!! BWAAAAHAA FRAKKIN HAAAAA!!! Suuuuuure we will…
Vodpod videos no longer available.
Geithner, Donovan (HUD) are meeting with the top 25 mortgage servicers in the WH today, let’s hope we get something meaningful from it….if they simply correct the new appraisal code we can get some movement on refis and purchases and mods..
S&P said its index of 10 metropolitan areas rose 0.4 percent in May after a 0.7 percent drop in April, for an 16.8 percent year-over-year drop.
“To put it in perspective, this is the first time we have seen broad increases in home prices in 34 months,” David M. Blitzer, chairman of the index committee at S&P, said in a statement. “This could be an indication that home price declines are finally stabilizing”. The 10 and 20-city indexes reported positive returns for the first time since summer of 2006.
Sales of new homes jumped 11 percent in June, the biggest monthly gain in eight years, the Commerce Department said on Monday, … Existing home sales rose for the third straight month in June, the National Association of Realtors said last week, surpassing forecasts and feeding optimism about the beleaguered housing sector.
Still, caution is warranted as long as the U.S. unemployment rate keeps rising, economists advised. That rate is at its highest in nearly 26 years and is headed to double-digit levels. Signs of stability are far more likely than prospects for near-term recovery in housing, many economists agree. For a rebound, consumer confidence needs to improve, foreclosures need to start falling from their record pace and potential buyers need to have a sense that it won’t be even cheaper to purchase if they keep waiting.
On that note, Consumer Confidence FELL again, see here- The Conference Board, an industry group, said its index of consumer attitudes slid to 46.6 in July from 49.3 in June.
More after the break:
Market Mover Thursday: Existing Home Sales Rise, Prices Fall 15.4% y/y…
And the beat(ing) homeowners are taking goes on….the markets are up 175 on the DOW, IMO missing the point these are short sales and foreclosures, the banks are holding shadow inventory and unemployment is still climbing…as long as homeowners continue to see their home values drop and jobless rates rise we will not spend….
Existing-home sales rose again in June from the previous month, but prices are still down sharply compared with last year. Home resales rose more than expected, by 3.6%, to a 4.89 million annual rate from a revised 4.72 million in May, the National Association of Realtors said Thursday.The NAR originally reported May sales up 2.4% to 4.77 million. Wall Street expected a sales rate of 4.85 million sales rate for previously owned homes.
Foreclosures and short sales reflect 31% of sales in June. Distressed property sales have pushed prices lower, year over year. The median price for an existing home last month was $181,800, a 15.4% decrease from June 2008.
The average 30-year mortgage rate rose to 5.42% in June from 4.86% in May, Freddie Mac data show. Tighter credit and rising unemployment are also reducing sales.
Previously owned home sales, year-over-year, were down 0.2% from the pace in June 2008, Thursday report said.
Weak demand has kept inventories of unsold homes high. Inventories of previously owned homes fell 0.7% at the end of June to 3.82 million available for sale. That represented a 9.4-month supply at the current sales pace, compared to 9.8 in May. Excess supply is depressing prices….
Market Mover Tuesday: Case Shiller Housing Index: down 18.1 % y/y; insured defaults rising…
Pace of declines slowing? It would be a start on a bottom…..talk about a stretch for good news though, the rate moderated from a y/y drop of 18.7% to a y/y drop of 18.1%, a .06% improvement, nothing to write home about, pardon the pun….
…The index of 20 metropolitan areas dipped 0.6 percent in April from March, after a 2.2 percent decline the month before, for an 18.1 percent downturn from a year earlier.
S&P said its index of 10 metropolitan areas declined 0.6 percent in April for an 18 percent year-over-year drop, after falling 2.1 percent month on month in March.
The rate of annual decline in these measures has improved, from 18.7 percent for both indexes in March.
“While one month’s data cannot determine if a turnaround has begun, it seems that some stabilization may be appearing in some of the regions,” David M. Blitzer, chairman of the index committee at S&P, said in a statement. “We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here.”…
In other news defaults are up, and this is unemployment related defaults now on prime loans, the subprime bubble is over:
Defaults on privately insured U.S. mortgages rose in May following three months of declines, and the number brought up to date fell, providing new evidence that the nation’s housing market is still deteriorating.
The Mortgage Insurance Companies of America, a trade group, said 87,904 insured borrowers were at least 60 days late on payments in May, up 8 percent from April and up 29 percent from a year earlier. Late payments often foreshadow foreclosure.Mortgages brought up to date totaled just 52,590, down 10 percent from April and the fewest since January. But so-called insurance cures were up 29 percent from a year earlier.
Private mortgage insurance lets people buy homes with down payments of less than 20 percent, and guarantees that lenders will be repaid even if borrowers default. Insurance in force totaled $922 billion in May, the trade group said.
The industry has been tightening its standards after struggling with losses from having backed subprime and other risky mortgages, which have eaten into capital. Increasingly, mortgage providers are demanding 20 percent down payments, which could obviate the need for mortgage insurance.
In addition, while most major U.S. home loan providers adopted mortgage-modification programs in the last year to keep borrowers in their homes, many foreclosure moratoriums expired in March…
In other news PPIP is going forward and GE is getting money from it..shockah! Frakkers….
Housing Update: Median Home Price drops 16.8% y/y….MBA makes 700B downward revision to ’09 originations forecast…
Ouch: National Median Home Price at $173,000 for May, a drop of 16.8% year over year….May existing home sales up 2.4%, same as April….much lower than needed for this inventory, especially since roughly 45% of the sales are foreclosure sales to investors….dollar is extending its losses and markets are down, DOW off 40 now to 8298….10 yr yield 3.63%….Gold 918….Oil down to 67…
So taking a closer look at the incredible revisions by MBA yesterday, it appears as though the Making Home Affordable Program has been a failure to date. Not the EPIC FAIL of Hank Paulson’s original plan, but a FAIL nonetheless….
MBA dropped the hammer on the outlook yesterday:
…The Mortgage Bankers Association cut its forecast of home-mortgage lending this year by 27% amid deflating hopes for a boom in refinancing. The trade group said Monday that it now expects $2.034 trillion of originations of mortgages for one- to four-family homes in 2009, down from a forecast of $2.780 trillion in March, when falling interest rates spurred expectations for huge volumes of refinancing….
Here are the numbers, of the millions of homeowners facing foreclosure, a grand total of 13,000 loans have been modified/refi’d. Yep.
…Meanwhile, the MBA said, the volume of refinancing under the Obama administration’s Home Affordable Refinance Program so far has been “very low.” This program is designed to help borrowers whose loans are backed by government-owned investors Fannie Mae and Freddie Mac, the biggest providers of funding for U.S. mortgages.
“While the number of loans completed under this program is likely to increase, it is difficult to craft a scenario under which origination volumes would come anywhere close to reaching the numbers originally envisioned for the program, particularly under our higher rate environment,” the trade group said.
So how low is it? Let’s check in on the housing beat with Diana Olick of CNBC who has the real scoop:
…Today the Mortgage Bankers Association put out a revision in its 2009 originations forecast. A big revision. A $700 billion revision. “$84 billion of the drop is due to lower purchase originations and the rest is due to lower rate/term refinances and very low volumes in the Fannie Mae and Freddie Mac Home Affordable Refinance Program (HARP).”
…The MBA had raised its forecast by over $800 billion in March following the drop in interest rates associated with the Fed’s announcement on the Treasury bond and mortgage-backed securities purchases programs as well as the implementation of the HARP….
……The refi’s dropped off for two reasons, one being the interest rate rise, and the second being the poor results on the HARP….While generally accepted estimates were that around 1.5 to 2 million borrowers might avail themselves of this program, with many more potentially eligible, to date only about 13,000 loans have been completed,” notes the MBA’s chief economist, Jay Brinkmann. …
Did anyone else catch Larry Kudlow get curt and rather harsh with Diana on The Call last week? Diana makes it clear in this blog report her position and reporting on the housing market is based on the facts, not the ‘Goldilocks wannabe green shoots’ scenario we all know Larry wants to find…..the harsh reality of our housing market, and it is pretty damned harsh here in AZ lemme tell ya:
…A lot of folks out there contend that I am overly bearish on the beat I cover. Some go so far as to call me “miserable,” while others claim I choose to see the glass half empty. I am and do neither. I’m not a bear; I’m a realist. It’s your right to have an opinion, but it’s not my job. My job is to gather for you and funnel to you the facts: The numbers, the trends, the industry forecasts and the experts’ analyses. I have no agenda and frankly gain nothing from being either a bull or a bear. If anything, I’d be better off personally as a housing bull. CNBC doesn’t allow me to own stock, but I can own a house, and I do. If you think housing has bottomed, that’s your opinion, but that’s just what it is: Opinion.
In-Depth look – Home Prices To Continue Decline – Bloomberg
Interview and discussion with Robert Shiller of the Yale University. He gives his thoughts on the housing market that shows weakness. (Bloomberg News)
Vodpod videos no longer available.
Moderate in the Middle 