New York Times (01/29/08) P. C3; Grynbaum, Michael M.
The Commerce Department's recent new-home sales report reveals substantial weakness in the housing market; and more declines are on the horizon, according to some economists. The report shows a 26-percent plunge in sales volume last year compared to 2006 and just a 0.2-percent increase in the median price to $246,900 over the same period. New-home sales fell 4.7 percent to an annual pace of 604,000 in December, and the median price of $219,200 marked a decline of 10.9 percent from the same month of the prior year. Regionally, the largest decrease of 56 percent was recorded in the Midwest during the year-over-year period ended in December; while sales fell 43 percent in the West, 36 percent in the South and 27 percent in the Northeast. The Commerce Department report also reveals a revision in November's new-home sales to an annual rate of 634,000 from the initial estimate of 647,000.
Thursday, January 31, 2008
Loan Defaults Continue Rising
Los Angeles Times (01/29/08)
Wachovia Corp. reports a 2.43-percentage-point jump in defaulted loans underpinning 20 subprime bonds issued during the first six months of 2006 to 28.1 percent in December, following a gain of 2.25 percentage points the prior month. An increase in adjustable-rate mortgage payments is responsible for rising defaults, according to the bank, which notes that falling home prices are complicating borrowers' refinancing or sale plans. The pain could worsen, according to the Wachovia report, as an estimated $200 billion worth of loans written to borrowers with flawed credit are on track to adjust to higher rates in 2008.
Wachovia Corp. reports a 2.43-percentage-point jump in defaulted loans underpinning 20 subprime bonds issued during the first six months of 2006 to 28.1 percent in December, following a gain of 2.25 percentage points the prior month. An increase in adjustable-rate mortgage payments is responsible for rising defaults, according to the bank, which notes that falling home prices are complicating borrowers' refinancing or sale plans. The pain could worsen, according to the Wachovia report, as an estimated $200 billion worth of loans written to borrowers with flawed credit are on track to adjust to higher rates in 2008.
Jumbo Loans Spell Relief
Washington Times (01/29/08); Hill, Patrice
Economists are optimistic that language included in the stimulus package to raise the limit on jumbo loans will lead to a major refinancing boom this year. The $150 billion package of tax cuts and rebates includes a provision to increase the conforming loan limit from the current threshold of $417,000 to as high as $729,000 in costly housing areas such as New York and California, which would make jumbo loans cheaper for buyers and more marketable for investors. Richard Berner, chief economist at Morgan Stanley, says jumbo loans account for about one-fifth of all outstanding mortgages; and he expects consumers to save more than the record $31 billion windfall recorded during the 2003 refinancing wave. "It could do a lot to unfreeze the mortgage market," agrees John Rutledge, an economic consultant and former Reagan economic adviser.
Economists are optimistic that language included in the stimulus package to raise the limit on jumbo loans will lead to a major refinancing boom this year. The $150 billion package of tax cuts and rebates includes a provision to increase the conforming loan limit from the current threshold of $417,000 to as high as $729,000 in costly housing areas such as New York and California, which would make jumbo loans cheaper for buyers and more marketable for investors. Richard Berner, chief economist at Morgan Stanley, says jumbo loans account for about one-fifth of all outstanding mortgages; and he expects consumers to save more than the record $31 billion windfall recorded during the 2003 refinancing wave. "It could do a lot to unfreeze the mortgage market," agrees John Rutledge, an economic consultant and former Reagan economic adviser.
Treasury Reserves OK for Stimulus With FHA Reform
American Banker (01/29/08) P. 20; Kaper, Stacy
The White House surprised many on Monday by suddenly withdrawing its support for the inclusion of FHA reforms in President Bush's proposed economic stimulus package. Bush had previously made several personal pleas to Capitol Hill legislators on the importance of passing the bill, which would allow the FHA to insure more loans. Attaching the provisions to his economic stimulus plan had been viewed as a mostly innocuous move on the way to quick enactment. Among the provisions in jeopardy is one that would relax down-payment requirements and one that would temporarily raise the conforming-loan limit, thus give Fannie Mae and Freddie Mac a chunk of the jumbo loan market. A Treasury spokesperson said the department prefers that Congress address FHA reform as a separate issue from the economic stimulus package.
The White House surprised many on Monday by suddenly withdrawing its support for the inclusion of FHA reforms in President Bush's proposed economic stimulus package. Bush had previously made several personal pleas to Capitol Hill legislators on the importance of passing the bill, which would allow the FHA to insure more loans. Attaching the provisions to his economic stimulus plan had been viewed as a mostly innocuous move on the way to quick enactment. Among the provisions in jeopardy is one that would relax down-payment requirements and one that would temporarily raise the conforming-loan limit, thus give Fannie Mae and Freddie Mac a chunk of the jumbo loan market. A Treasury spokesperson said the department prefers that Congress address FHA reform as a separate issue from the economic stimulus package.
Fed Lowers Rate to 3% as Six-Year U.S. Expansion Falters
2008-01-30 14:14 (New York)
By Craig Torres
Jan. 30 (Bloomberg) -- The Federal Reserve lowered its
benchmark interest rate by half a percentage point to 3 percent,
the second cut in as many weeks, to prevent the U.S. economy
from sinking into a recession.
``Today's policy action, combined with those taken earlier,
should help to promote moderate growth over time and to mitigate
the risks to economic activity,'' the Federal Open Market
Committee said in a statement after meeting today in Washington.
``However, downside risks to growth remain.''
The move, coupled with the Jan. 22 emergency cut of three-
quarters of a point, is the fastest easing of monetary policy
since 1990. Hours before the decision was announced, the
Commerce Department reported that gross domestic product grew
0.6 percent in the fourth quarter, half the pace forecast by
economists.
``Financial markets remain under considerable stress, and
credit has tightened further for some businesses and
households,'' the Fed said today. ``Recent information indicates
a deepening of the housing contraction as well as some softening
in labor markets.''
Fed officials said they will continue to assess financial
markets and the economy ``and will act in a timely manner as
needed.''
Chairman Ben S. Bernanke and the Fed's Board of Governors
also voted to cut the discount rate, the cost of direct loans
from the central bank, to 3.5 percent from 4 percent.
Fisher Dissents
Dallas Fed President Richard Fisher dissented from today's
decision, preferring no change.
Policy makers presented revised three-year economic
forecasts at this week's gathering. The Fed will release the
projections along with minutes of the meeting on Feb. 20.
``It is a very uncertain time for the outlook,'' Laurence
Meyer, a former Fed governor and vice chairman of Macroeconomic
Advisers LLC, said before the announcement. ``The good news is
that monetary policy makers have the flexibility to respond to
changing circumstances.''
Today's Commerce Department figures showed the Fed's
preferred inflation gauge rose at a 2.7 percent annualized rate
last quarter. Fed officials in October forecast the personal
consumption expenditures price index minus food and energy would
rise 1.6 percent to 1.9 percent in 2010, offering a measure of
their longer-term inflation objective.
``The Committee expects inflation to moderate in coming
quarters, but it will be necessary to continue to monitor
inflation developments carefully,'' the Fed said in today's
statement.
Wall Street firms including Morgan Stanley, Merrill Lynch &
Co., Goldman Sachs Group Inc. and Citigroup Inc. are forecasting
the first recession since 2001 this year. Still, executives at
firms such as Dow Chemical Co. said they don't detect a
downturn yet, while risks remain.
This year ``will be slower than 2007,'' Andrew Liveris, the
chairman and chief executive officer of Dow Chemical, said
yesterday. ``It is an inconvenience, not a catastrophe.''
United Parcel Service Inc., Caterpillar Inc. and General
Electric Co. are relying on gains overseas to counter slower
growth at home.
Fed policy makers have struggled since August to contain
the economic damage sparked by the worst housing recession in a
quarter-century. The world's largest banks and securities firms
have recorded more than $133 billion in asset writedowns and
credit losses since the beginning of 2007, which analysts blamed
on weak and fragmented supervision and poor credit analysis.
Foreclosure rates rose 75 percent in 2007 as a record
amount of adjustable-rate loans to borrowers with weak or
limited credit histories reset to higher rates, RealtyTrac Inc.
data show. Home prices in 20 U.S. metropolitan areas fell 7.7
percent in November from a year earlier, the 11th consecutive
decline, the S&P/Case-Shiller home-price index showed yesterday.
``We are in a historic housing bust right now, comparable
to that of the Great Depression,'' said Robert Shiller, chief
economist of MacroMarkets LLC in Madison, New Jersey, who co-
founded the house-price index. ``The unraveling of that has
unpredictable consequences.''
Fed officials waited until September to cut the benchmark
lending rate, even though premiums on corporate bonds and lower-
rated securities began to climb in late June.
By December, Fed policy makers had cut the benchmark
lending rate 1 percentage point, yet still described the policy
rate as ``somewhat restrictive'' as they deliberated whether to
cut again that month, minutes show.
The government's December payroll report, which showed a
loss of 13,000 private sector jobs, the first decline since July
2003, began to reshape Fed officials' views about risks.
Bernanke used a Jan. 10 speech to update the public. ``The
baseline outlook for real activity in 2008 has worsened and the
downside risks to growth have become more pronounced,'' he said,
breaking with the Fed's statement a month earlier which only
expressed ``uncertainty'' about the outlook. He pledged
``substantive additional action as needed.''
--With reporting by Michael McKee and Kathleen Hays in New York.
Editors: Chris Anstey, Daniel Moss
By Craig Torres
Jan. 30 (Bloomberg) -- The Federal Reserve lowered its
benchmark interest rate by half a percentage point to 3 percent,
the second cut in as many weeks, to prevent the U.S. economy
from sinking into a recession.
``Today's policy action, combined with those taken earlier,
should help to promote moderate growth over time and to mitigate
the risks to economic activity,'' the Federal Open Market
Committee said in a statement after meeting today in Washington.
``However, downside risks to growth remain.''
The move, coupled with the Jan. 22 emergency cut of three-
quarters of a point, is the fastest easing of monetary policy
since 1990. Hours before the decision was announced, the
Commerce Department reported that gross domestic product grew
0.6 percent in the fourth quarter, half the pace forecast by
economists.
``Financial markets remain under considerable stress, and
credit has tightened further for some businesses and
households,'' the Fed said today. ``Recent information indicates
a deepening of the housing contraction as well as some softening
in labor markets.''
Fed officials said they will continue to assess financial
markets and the economy ``and will act in a timely manner as
needed.''
Chairman Ben S. Bernanke and the Fed's Board of Governors
also voted to cut the discount rate, the cost of direct loans
from the central bank, to 3.5 percent from 4 percent.
Fisher Dissents
Dallas Fed President Richard Fisher dissented from today's
decision, preferring no change.
Policy makers presented revised three-year economic
forecasts at this week's gathering. The Fed will release the
projections along with minutes of the meeting on Feb. 20.
``It is a very uncertain time for the outlook,'' Laurence
Meyer, a former Fed governor and vice chairman of Macroeconomic
Advisers LLC, said before the announcement. ``The good news is
that monetary policy makers have the flexibility to respond to
changing circumstances.''
Today's Commerce Department figures showed the Fed's
preferred inflation gauge rose at a 2.7 percent annualized rate
last quarter. Fed officials in October forecast the personal
consumption expenditures price index minus food and energy would
rise 1.6 percent to 1.9 percent in 2010, offering a measure of
their longer-term inflation objective.
``The Committee expects inflation to moderate in coming
quarters, but it will be necessary to continue to monitor
inflation developments carefully,'' the Fed said in today's
statement.
Wall Street firms including Morgan Stanley, Merrill Lynch &
Co., Goldman Sachs Group Inc. and Citigroup Inc. are forecasting
the first recession since 2001 this year. Still, executives at
firms such as Dow Chemical Co. said they don't detect a
downturn yet, while risks remain.
This year ``will be slower than 2007,'' Andrew Liveris, the
chairman and chief executive officer of Dow Chemical, said
yesterday. ``It is an inconvenience, not a catastrophe.''
United Parcel Service Inc., Caterpillar Inc. and General
Electric Co. are relying on gains overseas to counter slower
growth at home.
Fed policy makers have struggled since August to contain
the economic damage sparked by the worst housing recession in a
quarter-century. The world's largest banks and securities firms
have recorded more than $133 billion in asset writedowns and
credit losses since the beginning of 2007, which analysts blamed
on weak and fragmented supervision and poor credit analysis.
Foreclosure rates rose 75 percent in 2007 as a record
amount of adjustable-rate loans to borrowers with weak or
limited credit histories reset to higher rates, RealtyTrac Inc.
data show. Home prices in 20 U.S. metropolitan areas fell 7.7
percent in November from a year earlier, the 11th consecutive
decline, the S&P/Case-Shiller home-price index showed yesterday.
``We are in a historic housing bust right now, comparable
to that of the Great Depression,'' said Robert Shiller, chief
economist of MacroMarkets LLC in Madison, New Jersey, who co-
founded the house-price index. ``The unraveling of that has
unpredictable consequences.''
Fed officials waited until September to cut the benchmark
lending rate, even though premiums on corporate bonds and lower-
rated securities began to climb in late June.
By December, Fed policy makers had cut the benchmark
lending rate 1 percentage point, yet still described the policy
rate as ``somewhat restrictive'' as they deliberated whether to
cut again that month, minutes show.
The government's December payroll report, which showed a
loss of 13,000 private sector jobs, the first decline since July
2003, began to reshape Fed officials' views about risks.
Bernanke used a Jan. 10 speech to update the public. ``The
baseline outlook for real activity in 2008 has worsened and the
downside risks to growth have become more pronounced,'' he said,
breaking with the Fed's statement a month earlier which only
expressed ``uncertainty'' about the outlook. He pledged
``substantive additional action as needed.''
--With reporting by Michael McKee and Kathleen Hays in New York.
Editors: Chris Anstey, Daniel Moss
S&P Ramps Up Mortgage Downgrades
Wall Street Journal (01/31/08) P. A3; Lucchetti, Aaron; Ng, Serena
Standard & Poor's this week downgraded or threatened to downgrade more than 8,000 mortgage investments--a move that could impact regional banks, credit unions, government-sponsored enterprises and some European and Asian banks that have not already taken big write-downs. While not all of the bonds downgraded or put on watch will produce losses, the actions signal the potential for an even more pessimistic outlook that initially expected. S&P is projecting that a widening array of financial institutions will ultimately face mortgage-securities losses totaling more than $265 billion. S&P economist David Wyss, meanwhile, forecasts that U.S. home-price declines could top 13 percent by the end of this year and that the housing market will likely not bottom out until at least the first quarter of 2009.
Standard & Poor's this week downgraded or threatened to downgrade more than 8,000 mortgage investments--a move that could impact regional banks, credit unions, government-sponsored enterprises and some European and Asian banks that have not already taken big write-downs. While not all of the bonds downgraded or put on watch will produce losses, the actions signal the potential for an even more pessimistic outlook that initially expected. S&P is projecting that a widening array of financial institutions will ultimately face mortgage-securities losses totaling more than $265 billion. S&P economist David Wyss, meanwhile, forecasts that U.S. home-price declines could top 13 percent by the end of this year and that the housing market will likely not bottom out until at least the first quarter of 2009.
Homeowners Late on Loans Often Don't Seek Help
USA Today (01/31/08) P. 1B; Knox, Noelle
A survey expected to be released on Jan. 31 reveals that 58 percent of delinquent homeowners do not realize that their mortgage lender may offer some assistance that could keep them in their homes and that 56 percent do not know that free counseling is available. Even so, the inability of mortgage lenders and loan servicers to make contact with homeowners is the biggest challenge to stemming the rising tide of foreclosures. "Servicers are unable to contact borrowers in more than half of the foreclosures we see," says Ingrid Beckles, vice president of servicing for Freddie Mac. The Freddie Mac/Roper poll of 1,400 delinquent borrowers also shows that 25 percent of homeowners who were at least three months behind on their loan did not contact their lender or loan servicer because they did not have enough money to make a payment, were in denial about their financial problems or mistakenly assumed that no assistance was available.
A survey expected to be released on Jan. 31 reveals that 58 percent of delinquent homeowners do not realize that their mortgage lender may offer some assistance that could keep them in their homes and that 56 percent do not know that free counseling is available. Even so, the inability of mortgage lenders and loan servicers to make contact with homeowners is the biggest challenge to stemming the rising tide of foreclosures. "Servicers are unable to contact borrowers in more than half of the foreclosures we see," says Ingrid Beckles, vice president of servicing for Freddie Mac. The Freddie Mac/Roper poll of 1,400 delinquent borrowers also shows that 25 percent of homeowners who were at least three months behind on their loan did not contact their lender or loan servicer because they did not have enough money to make a payment, were in denial about their financial problems or mistakenly assumed that no assistance was available.
Isakson Pitches $15,000 Tax Credit for Home Buyers
Macon Telegraph (GA) (01/31/08)
Sen. Johnny Isakson, R-Ga., has introduced a proposal in Washington to give home buyers a tax credit of $15,000, to be distributed over a three-year period. Property purchases by owner-occupiers that close between March 2008 and February 2009 would qualify for the incentive, which Isakson said will stimulate new demand for homes. "I don't know a lot about a lot of things, but I made my living in this business for 32 years," noted the former realty executive during a Capitol Hill press conference. "You gotta put back into the equation the missing man who's just not there, and that's the buyer." While Isakson believes the legislation would additionally massage the residential property market by propping up the construction market, helping home builders shrink the oversupply of dwellings on the market and helping troubled borrowers and distressed lenders that are dealing with bad loans, critics say the focus needs to be on rescuing existing homeowners from the threat of foreclosure.
Sen. Johnny Isakson, R-Ga., has introduced a proposal in Washington to give home buyers a tax credit of $15,000, to be distributed over a three-year period. Property purchases by owner-occupiers that close between March 2008 and February 2009 would qualify for the incentive, which Isakson said will stimulate new demand for homes. "I don't know a lot about a lot of things, but I made my living in this business for 32 years," noted the former realty executive during a Capitol Hill press conference. "You gotta put back into the equation the missing man who's just not there, and that's the buyer." While Isakson believes the legislation would additionally massage the residential property market by propping up the construction market, helping home builders shrink the oversupply of dwellings on the market and helping troubled borrowers and distressed lenders that are dealing with bad loans, critics say the focus needs to be on rescuing existing homeowners from the threat of foreclosure.
Mortgage-Relief Bill Rejected
San Jose Mercury News (CA) (01/31/08); Geissinger, Steve
A proposal designed to protect mortgage borrowers in California failed to win the two-thirds support necessary in the state Senate, falling short by just one vote. Sponsored by state Sen. Don Perata, D-Oakland, SB 926 would have compelled lenders to give customers more notice of a potential increase in borrowing costs, to discuss loan modification options with homeowners and to give owners more time to relocate out of a foreclosed property. The California Bankers Association and the California Mortgage Bankers Association were among those opposing the measure, which also would have penalized lenders $1,000 per day for failing to maintain foreclosed homes. Republican lawmakers agreed with the groups that the legislation could burden the lending industry.
A proposal designed to protect mortgage borrowers in California failed to win the two-thirds support necessary in the state Senate, falling short by just one vote. Sponsored by state Sen. Don Perata, D-Oakland, SB 926 would have compelled lenders to give customers more notice of a potential increase in borrowing costs, to discuss loan modification options with homeowners and to give owners more time to relocate out of a foreclosed property. The California Bankers Association and the California Mortgage Bankers Association were among those opposing the measure, which also would have penalized lenders $1,000 per day for failing to maintain foreclosed homes. Republican lawmakers agreed with the groups that the legislation could burden the lending industry.
Tuesday, January 29, 2008
Plunge in new home sales sets record
2007 slump capped by falling prices in December
By MARTIN CRUTSINGER, Associated Press
Posted Tuesday, January 29, 2008
WASHINGTON -- New home sales plunged in 2007 by the largest amount on record while home prices tumbled sharply in December. Analysts forecast more trouble in 2008 as housing tries to emerge from its worst slump in more than two decades.
The Commerce Department reported Monday that sales of new homes dropped by 26.4 percent last year to 774,000. That marked the biggest decline on record, surpassing the old mark of a 23.1 percent plunge in 1980.
The government reported that the median price of a new home barely budged last year, edging up a slight 0.2 percent to $246,900, the poorest showing since prices fell by 2.4 percent during the 1991 housing downturn.
And the slump in sales and prices appeared to be worsening at year's end. December sales fell by 4.7 percent, a bigger-than-expected drop, while the median price of a home fell by 10.4 percent last month, when compared to December 2006, the biggest 12-month decline in 37 years.
"It looks like the floor fell out of the housing market in December," said Mark Zandi, chief economist at Moody's Economy.com. He said the current slump is already on par with the deep housing downturn of the 1980s and could end up being the worst in the post-World War II period.
The data on new homes followed earlier reports that resales of homes dropped 13 percent last year, the biggest decline since 1982, while construction of new homes and apartments fell by 24.8 percent, the largest drop since 1980.
Zandi predicted that sales of new and older homes will likely hit bottom this spring and that construction will level off by this summer. But he said prices were likely to keep falling for the entire year as weak demand forces sellers to cut asking prices even further to move homes.
Housing is slumping now after a five-year boom. Demand for both new and older homes hit all-time highs for five straight years, ending in 2005, the peak of the boom. New home sales fell by 18.1 percent in 2006. The sales level last month is now down by 56.5 percent from the monthly peak hit in July 2005.
The prolonged slump in housing is raising fears that the weakness could be severe enough to push the country into a full-blown recession. In an effort to guard against that threat, the Federal Reserve cut a key interest rate last week by the largest amount in more than two decades, with a further rate cut expected on Wednesday when the Fed completes a two-day meeting.
"The worst housing market in 20 years has led us to the brink of a recession and I remain convinced that we need to address the housing mess as we continue discussions on an economic stimulus," said Sen. Charles Schumer, D-N.Y.
Jerry Howard, the chief executive officer of the National Association of Home Builders, said policymakers needed to offer greater relief, including raising the loan limits for Fannie and Freddie for two years instead of just one.
The 26.4 percent drop in sales for 2007 represented weakness in every part of the country except the Northeast, where sales posted a small 1.6 percent advance. Sales recorded declines of 32.2 percent in the West, 26.7 percent in the Midwest and 26.3 percent in the South.
It would take 9.6 months to eliminate the backlog of unsold new homes at the December sales pace, the longest stretch of time since the supply stood at 10.3 months in October 1981.
By MARTIN CRUTSINGER, Associated Press
Posted Tuesday, January 29, 2008
WASHINGTON -- New home sales plunged in 2007 by the largest amount on record while home prices tumbled sharply in December. Analysts forecast more trouble in 2008 as housing tries to emerge from its worst slump in more than two decades.
The Commerce Department reported Monday that sales of new homes dropped by 26.4 percent last year to 774,000. That marked the biggest decline on record, surpassing the old mark of a 23.1 percent plunge in 1980.
The government reported that the median price of a new home barely budged last year, edging up a slight 0.2 percent to $246,900, the poorest showing since prices fell by 2.4 percent during the 1991 housing downturn.
And the slump in sales and prices appeared to be worsening at year's end. December sales fell by 4.7 percent, a bigger-than-expected drop, while the median price of a home fell by 10.4 percent last month, when compared to December 2006, the biggest 12-month decline in 37 years.
"It looks like the floor fell out of the housing market in December," said Mark Zandi, chief economist at Moody's Economy.com. He said the current slump is already on par with the deep housing downturn of the 1980s and could end up being the worst in the post-World War II period.
The data on new homes followed earlier reports that resales of homes dropped 13 percent last year, the biggest decline since 1982, while construction of new homes and apartments fell by 24.8 percent, the largest drop since 1980.
Zandi predicted that sales of new and older homes will likely hit bottom this spring and that construction will level off by this summer. But he said prices were likely to keep falling for the entire year as weak demand forces sellers to cut asking prices even further to move homes.
Housing is slumping now after a five-year boom. Demand for both new and older homes hit all-time highs for five straight years, ending in 2005, the peak of the boom. New home sales fell by 18.1 percent in 2006. The sales level last month is now down by 56.5 percent from the monthly peak hit in July 2005.
The prolonged slump in housing is raising fears that the weakness could be severe enough to push the country into a full-blown recession. In an effort to guard against that threat, the Federal Reserve cut a key interest rate last week by the largest amount in more than two decades, with a further rate cut expected on Wednesday when the Fed completes a two-day meeting.
"The worst housing market in 20 years has led us to the brink of a recession and I remain convinced that we need to address the housing mess as we continue discussions on an economic stimulus," said Sen. Charles Schumer, D-N.Y.
Jerry Howard, the chief executive officer of the National Association of Home Builders, said policymakers needed to offer greater relief, including raising the loan limits for Fannie and Freddie for two years instead of just one.
The 26.4 percent drop in sales for 2007 represented weakness in every part of the country except the Northeast, where sales posted a small 1.6 percent advance. Sales recorded declines of 32.2 percent in the West, 26.7 percent in the Midwest and 26.3 percent in the South.
It would take 9.6 months to eliminate the backlog of unsold new homes at the December sales pace, the longest stretch of time since the supply stood at 10.3 months in October 1981.
Monday, January 28, 2008
New home sales fall by record amount
By MARTIN CRUTSINGER
AP Economics Writer
AP Photo/David Zalubowski
Advertisement
Latest Economic News
Stocks rise on rate cut hopes
An economy grows around Britney Spears
Senate Democrats adding to stimulus
New home sales fall by record amount
Corning, Halliburton among big movers
China promises to ensure fuel supplies
Blair wants Mideast peace in 2008
Wall Street braces for more volatility
Davos tests Zuma's African leadership
Shift to economy challenge for McCain
Multimedia
2008 U.S. Economic Stimulus Package
Buy AP Photo Reprints
Your Questions Answered
Ask AP: From Watergate to Jose Padilla
WASHINGTON (AP) -- New home sales plunged in 2007 by the largest amount on record while home prices tumbled sharply in December. Analysts forecast more trouble in 2008 as housing tries to emerge from its worst slump in more than two decades.
The Commerce Department reported Monday that sales of new homes dropped by 26.4 percent last year to 774,000. That marked the biggest decline on record, surpassing the old mark of a 23.1 percent plunge in 1980.
The government reported that the median price of a new home barely budged last year, edging up a slight 0.2 percent to $246,900, the poorest showing since prices fell by 2.4 percent during the 1991 housing downturn.
And the slump in sales and prices appeared to be worsening at year's end. December sales fell by 4.7 percent, a bigger-than-expected drop, while the median price of a home fell by 10.4 percent last month, when compared to December 2006, the biggest 12-month decline in 37 years.
"It looks like the floor fell out of the housing market in December," said Mark Zandi, chief economist at Moody's Economy.com. He said the current slump is already on par with the deep housing downturn of the 1980s and could end up being the worst in the post World War II period.
The data on new homes followed earlier reports that sales of existing homes dropped 13 percent last year, the biggest decline since 1982, while construction of new homes and apartments fell by 24.8 percent, the largest drop since 1980.
Zandi predicted that sales of new and existing homes will likely hit bottom this spring and that construction will level off by this summer. But he said prices were likely to keep falling for the entire year as weak demand forces sellers to cut asking prices even further to move homes.
Housing is slumping now after a five-year boom. Demand for both new and existing homes hit all-time highs for five straight years, ending in 2005, the peak of the boom. New home sales fell by 18.1 percent in 2006. The sales level last month is now down by 56.5 percent from the monthly peak hit in July 2005.
The prolonged slump in housing is raising concerns that the weakness could be severe enough to push the country into a full-blown recession. In an effort to guard against that threat, the Federal Reserve cut a key interest rate last week by the largest amount in more than two decades with a further rate cut expected on Wednesday when the Fed completes a two-day meeting.
In addition, President Bush and House leaders reached agreement on a $150 billion economic stimulus package last week which included items to boost housing by increasing the size of the mortgages that Fannie Mae and Freddie Mac and the Federal Housing Administration can handle. But critics said the continued plunge in housing showed that more dramatic action is needed.
"The worst housing market in 20 years has led us to the brink of a recession and I remain convinced that we need to address the housing mess as we continue discussions on an economic stimulus," said Sen. Charles Schumer, D-N.Y.
Jerry Howard, the chief executive officer of the National Association of Home Builders, said policymakers needed to offer greater relief including raising the loan limits for Fannie and Freddie for two years instead of just one.
The 26.4 percent drop in sales for 2007 represented weakness in every part of the country except the Northeast, where sales posted a small 1.6 percent advance. Sales recorded declines of 32.2 percent in the West, 26.7 percent in the Midwest and 26.3 percent in the South.
It would take 9.6 months to eliminate the backlog of unsold new homes at the December sales pace, the longest stretch of time since the month's supply stood at 10.3 months in October 1981.
The severe credit crunch that hit in August has made the troubles in housing worse because it has prompted banks and other lenders to tighten their standards, making it harder for prospective buyers to qualify for loans. Also adding to the problems facing prospective sellers is the rising tide of mortgage defaults, which are dumping more homes on an already glutted market.
"We are seeing the compounding effects of rising subprime mortgage defaults, a weakening real economy and housing market credit restraints," said Stuart Hoffman, chief economist at PNC Bank Corp.
Hoffman said all of the weakness in housing will likely convince the Fed to follow-up with last week's 0.75 percentage point rate cut with a half-point cut on Thursday.
AP Economics Writer
AP Photo/David Zalubowski
Advertisement
Latest Economic News
Stocks rise on rate cut hopes
An economy grows around Britney Spears
Senate Democrats adding to stimulus
New home sales fall by record amount
Corning, Halliburton among big movers
China promises to ensure fuel supplies
Blair wants Mideast peace in 2008
Wall Street braces for more volatility
Davos tests Zuma's African leadership
Shift to economy challenge for McCain
Multimedia
2008 U.S. Economic Stimulus Package
Buy AP Photo Reprints
Your Questions Answered
Ask AP: From Watergate to Jose Padilla
WASHINGTON (AP) -- New home sales plunged in 2007 by the largest amount on record while home prices tumbled sharply in December. Analysts forecast more trouble in 2008 as housing tries to emerge from its worst slump in more than two decades.
The Commerce Department reported Monday that sales of new homes dropped by 26.4 percent last year to 774,000. That marked the biggest decline on record, surpassing the old mark of a 23.1 percent plunge in 1980.
The government reported that the median price of a new home barely budged last year, edging up a slight 0.2 percent to $246,900, the poorest showing since prices fell by 2.4 percent during the 1991 housing downturn.
And the slump in sales and prices appeared to be worsening at year's end. December sales fell by 4.7 percent, a bigger-than-expected drop, while the median price of a home fell by 10.4 percent last month, when compared to December 2006, the biggest 12-month decline in 37 years.
"It looks like the floor fell out of the housing market in December," said Mark Zandi, chief economist at Moody's Economy.com. He said the current slump is already on par with the deep housing downturn of the 1980s and could end up being the worst in the post World War II period.
The data on new homes followed earlier reports that sales of existing homes dropped 13 percent last year, the biggest decline since 1982, while construction of new homes and apartments fell by 24.8 percent, the largest drop since 1980.
Zandi predicted that sales of new and existing homes will likely hit bottom this spring and that construction will level off by this summer. But he said prices were likely to keep falling for the entire year as weak demand forces sellers to cut asking prices even further to move homes.
Housing is slumping now after a five-year boom. Demand for both new and existing homes hit all-time highs for five straight years, ending in 2005, the peak of the boom. New home sales fell by 18.1 percent in 2006. The sales level last month is now down by 56.5 percent from the monthly peak hit in July 2005.
The prolonged slump in housing is raising concerns that the weakness could be severe enough to push the country into a full-blown recession. In an effort to guard against that threat, the Federal Reserve cut a key interest rate last week by the largest amount in more than two decades with a further rate cut expected on Wednesday when the Fed completes a two-day meeting.
In addition, President Bush and House leaders reached agreement on a $150 billion economic stimulus package last week which included items to boost housing by increasing the size of the mortgages that Fannie Mae and Freddie Mac and the Federal Housing Administration can handle. But critics said the continued plunge in housing showed that more dramatic action is needed.
"The worst housing market in 20 years has led us to the brink of a recession and I remain convinced that we need to address the housing mess as we continue discussions on an economic stimulus," said Sen. Charles Schumer, D-N.Y.
Jerry Howard, the chief executive officer of the National Association of Home Builders, said policymakers needed to offer greater relief including raising the loan limits for Fannie and Freddie for two years instead of just one.
The 26.4 percent drop in sales for 2007 represented weakness in every part of the country except the Northeast, where sales posted a small 1.6 percent advance. Sales recorded declines of 32.2 percent in the West, 26.7 percent in the Midwest and 26.3 percent in the South.
It would take 9.6 months to eliminate the backlog of unsold new homes at the December sales pace, the longest stretch of time since the month's supply stood at 10.3 months in October 1981.
The severe credit crunch that hit in August has made the troubles in housing worse because it has prompted banks and other lenders to tighten their standards, making it harder for prospective buyers to qualify for loans. Also adding to the problems facing prospective sellers is the rising tide of mortgage defaults, which are dumping more homes on an already glutted market.
"We are seeing the compounding effects of rising subprime mortgage defaults, a weakening real economy and housing market credit restraints," said Stuart Hoffman, chief economist at PNC Bank Corp.
Hoffman said all of the weakness in housing will likely convince the Fed to follow-up with last week's 0.75 percentage point rate cut with a half-point cut on Thursday.
Sussex expands affordable housing
Effort gives developers incentives to target middle-income buyers
By DAN SHORTRIDGE, The News Journal
Posted Monday, January 28, 2008
Brandy Bennett, Sussex County's housing coordinator, said local developers are interested.
Sussex County is expanding its pilot program to boost the county's stock of moderately priced homes, aimed at speeding up the process and getting workers into new homes.
Two special developments are in the pipeline, with about 500 homes slated for construction within the next few years. But given the housing market slowdown, the county is now seeking developers interested in smaller projects involving 50 to 60 units each.
"Even though the market has slowed, there is still quite a bit of developer interest," said Brandy Bennett, the county's newly hired housing coordinator.
The county's median home price, $260,000, has spiked in recent years, with some observers concerned that middle-income residents -- teachers, police officers, nurses -- are being priced out of homeownership.
Sussex's program offers expedited zoning review and a density bonus to developers who price a certain number of homes at levels affordable to families making between $30,900 and $68,875, based on size. It has won kudos from state housing officials for its approach and potential impact.
But two years after it was launched, the effort has not yet produced a single home. Bennett said officials hope smaller developments will be able to be built more quickly than larger projects, with homes available in 18 months.
"They can construct units more quickly," she said.
Developers that have expressed interest so far are all local companies, primarily based in Sussex County, of all different sizes, Bennett said.
The two projects approved initially include the Villages of Elizabethtown, near Milton, and a development in the Belltown area, near Lewes.
A third project near Georgetown was in the works, but it didn't meet the program's stringent criteria.
Developers must designate 15 percent of their units as moderately priced, covering three tiers based on federal median income rates. The maximum price allowed is $225,000, Bennett said.
The sites must be located outside Level 4 development zones, mostly rural areas where the state has no plans to develop roads, schools or other infrastructure.
That creates a problem for some builders, "because that's a lot of the land that's available now," Bennett said.
Projects are judged based on a scoring system, and there is no maximum for how many projects can be approved. Developers are encouraged to attend a meeting next month to learn more. "We want to make sure they have a full understanding of what they're getting into," Bennett said.
Bill Lecates, director of the county's Community Development & Housing Department, said Bennett, 22, a Milton native who graduated from the University of Delaware last May, could be the "poster person" for the housing program.
She is currently living with her family and planning to buy her first home within the next few years. "I think there's a market for affordable housing," Bennett said. "There's not a market for $400,000 homes for people like myself and college graduates."
She said many of her friends are having problems finding jobs that pay well enough to move into homes of their own.
Purchasing a home in the program isn't as simple as lining up financing and making an offer. Buyers must meet the income guidelines, have lived in Sussex County for at least a year, be currently employed in the county, attend an orientation seminar and enter a lottery.
Once the first homes begin to hit the market, the county will launch a public education campaign to attract buyers. A Web site has been launched and brochures are being developed.
"We're trying to attract the young professional," Bennett said. "We expect a lot of people will be first-time homebuyers."
By DAN SHORTRIDGE, The News Journal
Posted Monday, January 28, 2008
Brandy Bennett, Sussex County's housing coordinator, said local developers are interested.
Sussex County is expanding its pilot program to boost the county's stock of moderately priced homes, aimed at speeding up the process and getting workers into new homes.
Two special developments are in the pipeline, with about 500 homes slated for construction within the next few years. But given the housing market slowdown, the county is now seeking developers interested in smaller projects involving 50 to 60 units each.
"Even though the market has slowed, there is still quite a bit of developer interest," said Brandy Bennett, the county's newly hired housing coordinator.
The county's median home price, $260,000, has spiked in recent years, with some observers concerned that middle-income residents -- teachers, police officers, nurses -- are being priced out of homeownership.
Sussex's program offers expedited zoning review and a density bonus to developers who price a certain number of homes at levels affordable to families making between $30,900 and $68,875, based on size. It has won kudos from state housing officials for its approach and potential impact.
But two years after it was launched, the effort has not yet produced a single home. Bennett said officials hope smaller developments will be able to be built more quickly than larger projects, with homes available in 18 months.
"They can construct units more quickly," she said.
Developers that have expressed interest so far are all local companies, primarily based in Sussex County, of all different sizes, Bennett said.
The two projects approved initially include the Villages of Elizabethtown, near Milton, and a development in the Belltown area, near Lewes.
A third project near Georgetown was in the works, but it didn't meet the program's stringent criteria.
Developers must designate 15 percent of their units as moderately priced, covering three tiers based on federal median income rates. The maximum price allowed is $225,000, Bennett said.
The sites must be located outside Level 4 development zones, mostly rural areas where the state has no plans to develop roads, schools or other infrastructure.
That creates a problem for some builders, "because that's a lot of the land that's available now," Bennett said.
Projects are judged based on a scoring system, and there is no maximum for how many projects can be approved. Developers are encouraged to attend a meeting next month to learn more. "We want to make sure they have a full understanding of what they're getting into," Bennett said.
Bill Lecates, director of the county's Community Development & Housing Department, said Bennett, 22, a Milton native who graduated from the University of Delaware last May, could be the "poster person" for the housing program.
She is currently living with her family and planning to buy her first home within the next few years. "I think there's a market for affordable housing," Bennett said. "There's not a market for $400,000 homes for people like myself and college graduates."
She said many of her friends are having problems finding jobs that pay well enough to move into homes of their own.
Purchasing a home in the program isn't as simple as lining up financing and making an offer. Buyers must meet the income guidelines, have lived in Sussex County for at least a year, be currently employed in the county, attend an orientation seminar and enter a lottery.
Once the first homes begin to hit the market, the county will launch a public education campaign to attract buyers. A Web site has been launched and brochures are being developed.
"We're trying to attract the young professional," Bennett said. "We expect a lot of people will be first-time homebuyers."
Saturday, January 26, 2008
Housing prices to free fall in 2008 - Merrill
According to a Merrill Lynch report, home prices will drop 15 percent this year, and declines will continue in 2009.
NEW YORK (CNNMoney.com) -- The worst housing financial crisis in decades is only going to get worse, a Merrill Lynch report said Wednesday.
The investment bank forecasted a 15 percent drop in housing prices in 2008 and a further 10 percent drop in 2009, with even more depreciation likely in 2010.
By contrast, the National Association of Realtors (NAR) expects housing prices to remain flat in 2008. NAR did cut its home price estimate for the current quarter, however, to a 5.3 percent year-over-year decline, which represents the steepest drop in that price measure on record. But NAR sees an uptick in home prices in the last two quarters of 2008.
"Merrill Lynch's figures are way too pessimistic, and they are unprecedented," Lawrence Yun, the National Association of Realtors chief economist told CNNMoney.com. "There is so much variation in local housing markets, and we see stable price conditions for 2008."
The current housing crisis and the depreciation in home prices have pummeled the economy, with businesses and consumers cutting back on spending, raising the specter of a recession. "Lower sales and higher inventory for sales are lowering the velocity of transactions," said Fritz Siebel, Director of US Property Derivatives for Tradition Financial Services. "That cannot be a sign of good health for the economy."
But for those who think that the worst is over, Merrill Lynch said that housing prices still remain comparatively high. The brokerage believes that home prices are still far above historical norms when compared to other measures such as rent or GDP. "By our calculations, it will take about a 20 to 30 percent decline in home prices to correct this imbalance," said the report.
Merrill Lynch believes that housing starts will most likely slide another 30 percent by the end of 2008 - a historic low.
The report says that the inventory situation only continues to worsen, as homebuilders are now looking at more than a nine months' supply. "The current supply/demand environment does not favor a swift recovery in the housing market, in our view," according to the report.
Yun agrees that the reduction in housing starts will not bode well for the economy, especially in the homebuilding industry, but he believes that the reduction will soothe the housing market by slowing the glut in inventory. "The reduction in housing starts is not stabilizing the economy, but it will stabilize the market," said Yun.
NEW YORK (CNNMoney.com) -- The worst housing financial crisis in decades is only going to get worse, a Merrill Lynch report said Wednesday.
The investment bank forecasted a 15 percent drop in housing prices in 2008 and a further 10 percent drop in 2009, with even more depreciation likely in 2010.
By contrast, the National Association of Realtors (NAR) expects housing prices to remain flat in 2008. NAR did cut its home price estimate for the current quarter, however, to a 5.3 percent year-over-year decline, which represents the steepest drop in that price measure on record. But NAR sees an uptick in home prices in the last two quarters of 2008.
"Merrill Lynch's figures are way too pessimistic, and they are unprecedented," Lawrence Yun, the National Association of Realtors chief economist told CNNMoney.com. "There is so much variation in local housing markets, and we see stable price conditions for 2008."
The current housing crisis and the depreciation in home prices have pummeled the economy, with businesses and consumers cutting back on spending, raising the specter of a recession. "Lower sales and higher inventory for sales are lowering the velocity of transactions," said Fritz Siebel, Director of US Property Derivatives for Tradition Financial Services. "That cannot be a sign of good health for the economy."
But for those who think that the worst is over, Merrill Lynch said that housing prices still remain comparatively high. The brokerage believes that home prices are still far above historical norms when compared to other measures such as rent or GDP. "By our calculations, it will take about a 20 to 30 percent decline in home prices to correct this imbalance," said the report.
Merrill Lynch believes that housing starts will most likely slide another 30 percent by the end of 2008 - a historic low.
The report says that the inventory situation only continues to worsen, as homebuilders are now looking at more than a nine months' supply. "The current supply/demand environment does not favor a swift recovery in the housing market, in our view," according to the report.
Yun agrees that the reduction in housing starts will not bode well for the economy, especially in the homebuilding industry, but he believes that the reduction will soothe the housing market by slowing the glut in inventory. "The reduction in housing starts is not stabilizing the economy, but it will stabilize the market," said Yun.
Homes see first annual price drop on record
The median price for a homes dropped 1.3 percent to $219,000 in 2007, while total home sales plunged by 13 percent for the year.
NEW YORK (CNNMoney.com) -- Prices of homes sold in December registered the biggest year-over-year decline on record, according to a report from an industry trade group, and 2007 is the first year on record that has seen a drop.
The National Association of Realtors (NAR) said on Thursday that the median price of homes sold in December fell nearly 6 percent from a year earlier to $208,400. The three biggest declines in prices ever recorded have now come in the last four months.
In addition to the December price decline, NAR reported the median price for all homes sold in 2007 fell 1.3 percent to $218,900, the first time that the annual price reading has shown a decline since the group started tracking that measure in 1968.
"What we saw in December was a rough month to cap off a rough year," said Mike Larson, real estate analyst with Weiss Research. "There wasn't much holiday cheer."
The news comes one day after Merrill Lynch released a study that forecasted a 15 percent decline in home sale prices for 2008.
Though NAR's chief economist Lawrence Yun called Merrill's figures "way too pessimistic," the group estimates that home prices for the current quarter will see a 5.3 percent year-over-year decline. That will represent the steepest quarterly drop on record.
Existing-home sales also declined in December, slipping 2.2 percent from November to an annual rate of 4.89 million units. The December rate is 22 percent below the year-ago pace.
The pace of total home sales plunged 12.8 percent for the year - the biggest drop on record. Single family home sales fell by 13 percent in 2007, which was the largest drop in 25 years.
The Realtors have only tracked total home sales, which includes condos and other multifamily units, since 1989, while single family home sales have only been logged since 1982.
Housing bailout: winners and losers
The existing-home sales pace represents a seasonally adjusted annual rate of home sales. The pace in December was below the forecast of 4.95 million forecast by economists surveyed by Briefing.com.
"Home sales remain weak despite improved affordability conditions in many parts of the country," said Yun. "Home prices are lower, mortgage interest rates continue to decline and incomes are higher, but many potential buyers are delaying a purchase."
The downturn in home sales has hammered the results of the nation's leading homebuilders. On Thursday Lennar, the nation's biggest homebuilder, reported a $1.25 billion fourth-quarter loss, the largest in the company's history.
Earlier this month, KB Home (KBH, Fortune 500), the nation's number five builder by sales, reported a fiscal fourth quarter loss that was nearly 10 times worse than forecasts. CEO Jeff Mezger told investors during an earnings call that "As we enter 2008, we see no indication markets are stabilizing."
Analysts are also forecasting that number two homebuilder Centex (CTX, Fortune 500), number three D.R. Horton (DHI, Fortune 500) and number four Pulte Homes (PHM, Fortune 500) will all report continuing losses until at least their final quarters of this calendar year. Hovnanian Enterprises (HOV, Fortune 500), the sixth-largest homebuilder, is expected to post losses in both fiscal 2008 and 2009.
The outfit forecast to see the quickest return to profitability is luxury home builder Toll Brothers (TOL, Fortune 500), which is expected to post a narrow gain in the quarter ending in July. It reported its first loss as a public company in its most recent period, which ended in October.
The outlook for the rest of 2008 remains gloomy, said Weiss Research's Mike Larson.
"We're looking at a battle royale in the market looking forward: 30-year mortgage rates have come down under 6 percent," he said. "But on the other hand, more borrowers are going to need jumbo financing to purchase a home due to the bad economy."
"Hopefully by the end of 2008 or beginning of 2009," he added, "supply levels will come down and we'll see some stabilization."
NEW YORK (CNNMoney.com) -- Prices of homes sold in December registered the biggest year-over-year decline on record, according to a report from an industry trade group, and 2007 is the first year on record that has seen a drop.
The National Association of Realtors (NAR) said on Thursday that the median price of homes sold in December fell nearly 6 percent from a year earlier to $208,400. The three biggest declines in prices ever recorded have now come in the last four months.
In addition to the December price decline, NAR reported the median price for all homes sold in 2007 fell 1.3 percent to $218,900, the first time that the annual price reading has shown a decline since the group started tracking that measure in 1968.
"What we saw in December was a rough month to cap off a rough year," said Mike Larson, real estate analyst with Weiss Research. "There wasn't much holiday cheer."
The news comes one day after Merrill Lynch released a study that forecasted a 15 percent decline in home sale prices for 2008.
Though NAR's chief economist Lawrence Yun called Merrill's figures "way too pessimistic," the group estimates that home prices for the current quarter will see a 5.3 percent year-over-year decline. That will represent the steepest quarterly drop on record.
Existing-home sales also declined in December, slipping 2.2 percent from November to an annual rate of 4.89 million units. The December rate is 22 percent below the year-ago pace.
The pace of total home sales plunged 12.8 percent for the year - the biggest drop on record. Single family home sales fell by 13 percent in 2007, which was the largest drop in 25 years.
The Realtors have only tracked total home sales, which includes condos and other multifamily units, since 1989, while single family home sales have only been logged since 1982.
Housing bailout: winners and losers
The existing-home sales pace represents a seasonally adjusted annual rate of home sales. The pace in December was below the forecast of 4.95 million forecast by economists surveyed by Briefing.com.
"Home sales remain weak despite improved affordability conditions in many parts of the country," said Yun. "Home prices are lower, mortgage interest rates continue to decline and incomes are higher, but many potential buyers are delaying a purchase."
The downturn in home sales has hammered the results of the nation's leading homebuilders. On Thursday Lennar, the nation's biggest homebuilder, reported a $1.25 billion fourth-quarter loss, the largest in the company's history.
Earlier this month, KB Home (KBH, Fortune 500), the nation's number five builder by sales, reported a fiscal fourth quarter loss that was nearly 10 times worse than forecasts. CEO Jeff Mezger told investors during an earnings call that "As we enter 2008, we see no indication markets are stabilizing."
Analysts are also forecasting that number two homebuilder Centex (CTX, Fortune 500), number three D.R. Horton (DHI, Fortune 500) and number four Pulte Homes (PHM, Fortune 500) will all report continuing losses until at least their final quarters of this calendar year. Hovnanian Enterprises (HOV, Fortune 500), the sixth-largest homebuilder, is expected to post losses in both fiscal 2008 and 2009.
The outfit forecast to see the quickest return to profitability is luxury home builder Toll Brothers (TOL, Fortune 500), which is expected to post a narrow gain in the quarter ending in July. It reported its first loss as a public company in its most recent period, which ended in October.
The outlook for the rest of 2008 remains gloomy, said Weiss Research's Mike Larson.
"We're looking at a battle royale in the market looking forward: 30-year mortgage rates have come down under 6 percent," he said. "But on the other hand, more borrowers are going to need jumbo financing to purchase a home due to the bad economy."
"Hopefully by the end of 2008 or beginning of 2009," he added, "supply levels will come down and we'll see some stabilization."
Fixed mortgage rates fall to lowest since '04
Rates on home loans drop after Fed makes emergency cut to fed funds rate, Freddie Mac says.
NEW YORK (CNNMoney.com) -- Mortgage rates continued to fall this week, with 30-year and 15-year fixed-rate mortgages hitting their lowest levels in nearly four years, Freddie Mac reported Thursday.
The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 5.48 percent for the week ending Thursday, down from 5.69 percent last week.
At this time last year, the 30-year fixed-rate mortgage averaged 6.25 percent. The 30-year rate has not been lower since the week ending March 25, 2004, when it averaged 5.40 percent.
"Economic news released last week confirmed the weak condition of the housing market," Freddie Mac (FRE, Fortune 500) vice president and chief economist Frank Nothaft said in a statement.
"When the Federal Reserve cut the target federal funds rate by three quarters of a percentage point, the action was extraordinary in both the magnitude and the timing of the rate cut," he said.
Freddie Mac said 15-year fixed-rate loans averaged 4.95 percent, down from 5.21 percent last week. A year ago, the 15-year rate averaged 5.98 percent. The 15-year rate has not been lower since the week ending April 1, 2004, when it averaged 4.84 percent.
Rates on five-year adjustable-rate mortgages (ARMs) averaged 5.13 percent, down from 5.40 percent last week. The 5-year rate averaged 6 percent at this time last year.
One-year Treasury-indexed ARMs averaged 4.99 percent, down from 5.26 percent last week. At this time a year ago, the 1-year ARM averaged 5.49 percent.
NEW YORK (CNNMoney.com) -- Mortgage rates continued to fall this week, with 30-year and 15-year fixed-rate mortgages hitting their lowest levels in nearly four years, Freddie Mac reported Thursday.
The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 5.48 percent for the week ending Thursday, down from 5.69 percent last week.
At this time last year, the 30-year fixed-rate mortgage averaged 6.25 percent. The 30-year rate has not been lower since the week ending March 25, 2004, when it averaged 5.40 percent.
"Economic news released last week confirmed the weak condition of the housing market," Freddie Mac (FRE, Fortune 500) vice president and chief economist Frank Nothaft said in a statement.
"When the Federal Reserve cut the target federal funds rate by three quarters of a percentage point, the action was extraordinary in both the magnitude and the timing of the rate cut," he said.
Freddie Mac said 15-year fixed-rate loans averaged 4.95 percent, down from 5.21 percent last week. A year ago, the 15-year rate averaged 5.98 percent. The 15-year rate has not been lower since the week ending April 1, 2004, when it averaged 4.84 percent.
Rates on five-year adjustable-rate mortgages (ARMs) averaged 5.13 percent, down from 5.40 percent last week. The 5-year rate averaged 6 percent at this time last year.
One-year Treasury-indexed ARMs averaged 4.99 percent, down from 5.26 percent last week. At this time a year ago, the 1-year ARM averaged 5.49 percent.
Regulator opposes stimulus plan's mortgage fix
Government agency takes stand against letting Freddie Mac and Fannie Mae buy higher-cost loans.
NEW YORK (CNNMoney.com) -- A government agency with regulatory power over Freddie Mac and Fannie Mae opposes lifting the loan caps for the two agencies, part of the economic stimulus package announced Thursday.
The stimulus package includes a proposal that temporarily raises loan limits for the government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. That could kick start sluggish residential real estate markets in high cost areas that have suffered through the liquidity squeeze that started last summer.
The director of the Office of Federal Housing Enterprise Oversight (OFHEO), James Lockhart, came out in opposition to the measure, releasing a statement on Thursday saying, "We are very disappointed in the proposal to increase the conforming loan limit as we believe it is a mistake to do so in the absence of comprehensive GSE regulatory reform."
The agency is likely concerned that if Fannie and Freddie take on even more debt, their financial health of could be imperiled.
"No one should be shocked by OFHEO's opposition," said Jaret Seiberg, an analyst at the policy research firm Stanford Group. "Director Lockhart has been extremely consistent in his demand that any change in conforming-loan limits be paired with legislation creating a stronger regulator."
According to Seiberg, Lockhart believes OFHEO lacks sufficient power to police the two GSEs. He believes that Lockhart wants to see many of the provisions included in the GSE reform bill, which would give OFHEO more authority over the GSEs, enabling it to establish stricter standards for lending and capital management. The bill has been languishing in Congress for about a year.
On Friday, Senator Chris Dodd, D-Conn., who chairs the Senate Banking Committee, pledged a renewed effort to get that bill through the Senate. That should be easier now that he's off the presidential campaign trail. One industry insider, speaking on background, said that when Dodd was running for president, nothing moved out of committee
The GSEs were created to ensure liquidity in mortgage markets. Lifting the caps on the size of mortgages that the GSEs purchase in secondary markets would advance that mission, and enable more buyers to procure financing.
But, increasing the dollar value of loans the GSEs are permitted to buy -- possibly to as much as $729,000 in some high cost areas, up from a maximum of $417,000 -- also increases the risk the agencies take on.
Many of these new, larger loans would be issued in expensive California markets where home prices have been in free fall. Plunging home values add to default rates by robbing home owners of equity they can tap when they hit a rough patch.
If a substantial proportion of the new, high-value loans default, the GSEs could take huge hits, on top of already substantial losses over the past few years.
That's where OFHEO's opposition stems from; it's main goal in advocating GSE reform, according to a speech Lockhart made this past December, is to promote safety and soundness in the enterprises.
Already, the GSEs have shown themselves to be vulnerable. Just six weeks ago, Freddie CEO Richard Syron forecast losses of at least $5.5 billion over the next couple of years from bad loans -- but they have already amassed huge obligations.
According to OFHEO, Fannie and Freddie together have debt of more than $1.5 trillion, and have guaranteed mortgage backed securities of more than $3.3 trillion, a total debt of nearly $4.9 trillion.
And this debt isn't backed by a lot of cash. Both Fannie and Freddie have minimum capital requirements of just 3.25 percent of assets - considerably lower than the 4 percent required for private lenders - making the agencies, at least potentially, very vulnerable.
"OFHEO," said Mark Zandi, chief economist for Moody's Economy.com, "wants to make sure the GSEs are following sound procedures and have sufficient capital."
And, according to Zandi, OFHEO's position has long been backed by the administration - until recently. But the mortgage meltdown, the stock market slump, job weakness and a looming recession, have overrun that position. Easier mortgage financing became part of the stimulus package; at least for now.
"What's particularly interesting," said Seiberg, "is that the word is that we could have opposition from Senate Republicans to including the GSE provisions in the stimulus package."
According to him, a spokesman for Senator Richard Shelby (Ala.) has already come out against it, as has Senator Mel Martinez (Fla.).
"There's a lot of clear momentum to get the package done," said Seiberg, "but it's not a slam dunk getting the GSE provisions included."
NEW YORK (CNNMoney.com) -- A government agency with regulatory power over Freddie Mac and Fannie Mae opposes lifting the loan caps for the two agencies, part of the economic stimulus package announced Thursday.
The stimulus package includes a proposal that temporarily raises loan limits for the government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. That could kick start sluggish residential real estate markets in high cost areas that have suffered through the liquidity squeeze that started last summer.
The director of the Office of Federal Housing Enterprise Oversight (OFHEO), James Lockhart, came out in opposition to the measure, releasing a statement on Thursday saying, "We are very disappointed in the proposal to increase the conforming loan limit as we believe it is a mistake to do so in the absence of comprehensive GSE regulatory reform."
The agency is likely concerned that if Fannie and Freddie take on even more debt, their financial health of could be imperiled.
"No one should be shocked by OFHEO's opposition," said Jaret Seiberg, an analyst at the policy research firm Stanford Group. "Director Lockhart has been extremely consistent in his demand that any change in conforming-loan limits be paired with legislation creating a stronger regulator."
According to Seiberg, Lockhart believes OFHEO lacks sufficient power to police the two GSEs. He believes that Lockhart wants to see many of the provisions included in the GSE reform bill, which would give OFHEO more authority over the GSEs, enabling it to establish stricter standards for lending and capital management. The bill has been languishing in Congress for about a year.
On Friday, Senator Chris Dodd, D-Conn., who chairs the Senate Banking Committee, pledged a renewed effort to get that bill through the Senate. That should be easier now that he's off the presidential campaign trail. One industry insider, speaking on background, said that when Dodd was running for president, nothing moved out of committee
The GSEs were created to ensure liquidity in mortgage markets. Lifting the caps on the size of mortgages that the GSEs purchase in secondary markets would advance that mission, and enable more buyers to procure financing.
But, increasing the dollar value of loans the GSEs are permitted to buy -- possibly to as much as $729,000 in some high cost areas, up from a maximum of $417,000 -- also increases the risk the agencies take on.
Many of these new, larger loans would be issued in expensive California markets where home prices have been in free fall. Plunging home values add to default rates by robbing home owners of equity they can tap when they hit a rough patch.
If a substantial proportion of the new, high-value loans default, the GSEs could take huge hits, on top of already substantial losses over the past few years.
That's where OFHEO's opposition stems from; it's main goal in advocating GSE reform, according to a speech Lockhart made this past December, is to promote safety and soundness in the enterprises.
Already, the GSEs have shown themselves to be vulnerable. Just six weeks ago, Freddie CEO Richard Syron forecast losses of at least $5.5 billion over the next couple of years from bad loans -- but they have already amassed huge obligations.
According to OFHEO, Fannie and Freddie together have debt of more than $1.5 trillion, and have guaranteed mortgage backed securities of more than $3.3 trillion, a total debt of nearly $4.9 trillion.
And this debt isn't backed by a lot of cash. Both Fannie and Freddie have minimum capital requirements of just 3.25 percent of assets - considerably lower than the 4 percent required for private lenders - making the agencies, at least potentially, very vulnerable.
"OFHEO," said Mark Zandi, chief economist for Moody's Economy.com, "wants to make sure the GSEs are following sound procedures and have sufficient capital."
And, according to Zandi, OFHEO's position has long been backed by the administration - until recently. But the mortgage meltdown, the stock market slump, job weakness and a looming recession, have overrun that position. Easier mortgage financing became part of the stimulus package; at least for now.
"What's particularly interesting," said Seiberg, "is that the word is that we could have opposition from Senate Republicans to including the GSE provisions in the stimulus package."
According to him, a spokesman for Senator Richard Shelby (Ala.) has already come out against it, as has Senator Mel Martinez (Fla.).
"There's a lot of clear momentum to get the package done," said Seiberg, "but it's not a slam dunk getting the GSE provisions included."
Homeowners bear brunt of industry slump
Sellers tired of waiting forced to take a hit by dropping prices
By MAUREEN MILFORD, The News Journal
Posted Saturday, January 26, 2008
Norman Harrison has been trying to sell his four-bedroom house in Brandywine Hundred since March. Now, he's "ready to let it go."
He's dropped the price by nearly $100,000.
"It hurts, yeah, but it hurts even more because I can't get rid of it. The market changed on me," said Harrison, 34, who bought the house in November 2006. "I'm not going to make what I wanted to make."
The housing slump hit Delaware homeowners hard in 2007 with sales of homes in New Castle and Kent counties tumbling by double digits from the previous year, according to year-end data provided by Prudential Fox & Roach Realtors. The Realtor does not track sales in Sussex County.
The median sales price declined in Kent County last year and experiencd only modest growth in New Castle County after years of rising prices.
Nationally in 2007, the median price for an existing home declined by 1.4 percent from 2006, the first drop since the Great Depression, according to Lawrence Yun, chief economist with the National Association of Realtors.
The situation has not improved so far this year, but at least the market doesn't appear to be declining further, Yun said. The association is predicting sales and prices will be flat in 2008.
"We think 2008 will be a stabilizing year," Yun said.
In Delaware, Kent County took the brunt of the downturn in 2007, with the number of homes sold last year dropping nearly 20 percent, according to Prudential Fox research, which measures sales of new and existing homes sold by real estate brokers. Sales of homes in New Castle County dropped 11 percent in 2007 from the previous year, according to Prudential Fox, the nation's fourth-largest residential real estate services company.
After years of ballooning prices, the rate of home appreciation is also beginning to drop in New Castle and Kent counties.
Katharine Pegg of Wilmington, who recently sold her town house near Rockford Park, estimates she could have gotten $90,000 to $100,000 more if she had sold her home in 2005. She had her house up for sale last summer for $490,000, but pulled it off the market because "nothing was happening."
When she relisted it recently, her real estate agent, Mary Beth Adelman, president and owner of Re/Max Associates in Wilmington, urged Pegg to cut the price by 8 percent. It sold in a matter of days for $440,000 and there were two offers.
"We still made money," Pegg said. "But it's just such a bad market."
Median sales prices in Kent County fell during 2007 by 3.1 percent to $220,000. That compares to a median sale price increase of 31.6 percent from 2004 to 2006.
While median prices in New Castle County rose 3.9 percent to $232,900 last year from 2006, the rate of appreciation was far off the 38.3 percent median sale price increase from 2004 to 2006.
"Prices are dropping. It's a fact. And they're not just dropping for a week or two," said Bert Green, a real estate broker with Re/Max Sunvest Realty in Brandywine Hundred.
The hardest-hit community in New Castle County was the Hockessin-Greenville-Centreville area, where the median sales prices declined 3 percent to $480,000. Communities south of the Chesapeake & Delaware Canal were flat with a median sales price of $300,000, while the median sales price in the Newark-Glasgow area rose 3 percent to $239,900.
"It seems to me pricing is much weaker since the summer," said Bill Luke, owner of Luke Real Estate in Wilmington.
'A great time to buy'
Basil and Jamie Krikelis of Brandywine Hundred, who are looking for a home within a commuting distance of downtown, have noticed the same.
"I think it's a great time to buy," said Basil Krikelis, a Wilmington lawyer. "We've been looking for two years and houses we couldn't afford then, we can now. There's definitely a lot of homes, a lot of options."
But the Krikelises also have to weigh a purchase against what they can get for their current house. "Our appraisal came in about $25,000 less than the year before," Basil Krikelis said.
To buyer Karin Kirkland, also of Brandywine Hundred, who is shopping for a house for her daughter to live in, prices haven't fallen substantially.
"I would say it's a buyers' market, but you're not getting foreclosure prices," Kirkland said.
That could explain why houses sat on the market longer in 2007. The length of time houses sat on the market in New Castle and Kent counties increased 38 percent to an average of 55 days.
"They don't feel it's bottomed out, so they're waiting," said Susan Taylor, vice president and manager of the Prudential Fox & Roach Greenville office.
Buyers also are aware that prices have been dropping in Florida, Arizona, Nevada and most of California, Yun said.
In Delaware, inventories also ballooned last year. In December, there was a nearly two-year supply of homes available in Kent County. In New Castle County, there was a 10-month supply. A healthy supply is less than three months, said Steve Storti, senior vice president of marketing with Prudential Fox.
"I've never seen it like this. And you can't find a single reason for why the entire market is in such a nose dive. Historically, it's always been interest rates. This time, you've got to create a laundry list," said Jack Corrozi, owner of Jack Corrozi Builders of Newport and a home builder since 1974.
Corrozi said he believes the market has yet to hit bottom.
"Unfortunately, there's been a panic out there," Corrozi said.
Rate cut offers hope
Actions taken this week in Washington should help, Yun said. In the first emergency rate change since 2001, the Federal Reserve earlier this week lowered the benchmark rate by 0.75 percentage points to 3.5 percent. It was the single biggest interest-rate cut in 23 years. An economic stimulus plan also is being considered in Washington.
"The interest rates are just so attractive, it's going to entice people into the market," Yun said.
Also, discussions are under way about raising the limit on loans that Fannie Mae and Freddie Mac can purchase in the secondary market beyond the present limit of $417,000 to more than $700,000. This would put more capital into the so-called jumbo market, Yun said.
"There will be higher sales activity in the second half of the year than in the first half," Yun said.
Even before the Fed action, a decline in interest rates from last year has helped the market, Adelman said. In mid-July, a 30-year mortgage stood at 6.73 percent, according to Freddie Mac's primary mortgage market survey. On Jan. 24, the rate for a 30-year fixed was 5.48 percent.
"The government has to do something because right now the real estate market is at a standstill," Adelman said.
By MAUREEN MILFORD, The News Journal
Posted Saturday, January 26, 2008
Norman Harrison has been trying to sell his four-bedroom house in Brandywine Hundred since March. Now, he's "ready to let it go."
He's dropped the price by nearly $100,000.
"It hurts, yeah, but it hurts even more because I can't get rid of it. The market changed on me," said Harrison, 34, who bought the house in November 2006. "I'm not going to make what I wanted to make."
The housing slump hit Delaware homeowners hard in 2007 with sales of homes in New Castle and Kent counties tumbling by double digits from the previous year, according to year-end data provided by Prudential Fox & Roach Realtors. The Realtor does not track sales in Sussex County.
The median sales price declined in Kent County last year and experiencd only modest growth in New Castle County after years of rising prices.
Nationally in 2007, the median price for an existing home declined by 1.4 percent from 2006, the first drop since the Great Depression, according to Lawrence Yun, chief economist with the National Association of Realtors.
The situation has not improved so far this year, but at least the market doesn't appear to be declining further, Yun said. The association is predicting sales and prices will be flat in 2008.
"We think 2008 will be a stabilizing year," Yun said.
In Delaware, Kent County took the brunt of the downturn in 2007, with the number of homes sold last year dropping nearly 20 percent, according to Prudential Fox research, which measures sales of new and existing homes sold by real estate brokers. Sales of homes in New Castle County dropped 11 percent in 2007 from the previous year, according to Prudential Fox, the nation's fourth-largest residential real estate services company.
After years of ballooning prices, the rate of home appreciation is also beginning to drop in New Castle and Kent counties.
Katharine Pegg of Wilmington, who recently sold her town house near Rockford Park, estimates she could have gotten $90,000 to $100,000 more if she had sold her home in 2005. She had her house up for sale last summer for $490,000, but pulled it off the market because "nothing was happening."
When she relisted it recently, her real estate agent, Mary Beth Adelman, president and owner of Re/Max Associates in Wilmington, urged Pegg to cut the price by 8 percent. It sold in a matter of days for $440,000 and there were two offers.
"We still made money," Pegg said. "But it's just such a bad market."
Median sales prices in Kent County fell during 2007 by 3.1 percent to $220,000. That compares to a median sale price increase of 31.6 percent from 2004 to 2006.
While median prices in New Castle County rose 3.9 percent to $232,900 last year from 2006, the rate of appreciation was far off the 38.3 percent median sale price increase from 2004 to 2006.
"Prices are dropping. It's a fact. And they're not just dropping for a week or two," said Bert Green, a real estate broker with Re/Max Sunvest Realty in Brandywine Hundred.
The hardest-hit community in New Castle County was the Hockessin-Greenville-Centreville area, where the median sales prices declined 3 percent to $480,000. Communities south of the Chesapeake & Delaware Canal were flat with a median sales price of $300,000, while the median sales price in the Newark-Glasgow area rose 3 percent to $239,900.
"It seems to me pricing is much weaker since the summer," said Bill Luke, owner of Luke Real Estate in Wilmington.
'A great time to buy'
Basil and Jamie Krikelis of Brandywine Hundred, who are looking for a home within a commuting distance of downtown, have noticed the same.
"I think it's a great time to buy," said Basil Krikelis, a Wilmington lawyer. "We've been looking for two years and houses we couldn't afford then, we can now. There's definitely a lot of homes, a lot of options."
But the Krikelises also have to weigh a purchase against what they can get for their current house. "Our appraisal came in about $25,000 less than the year before," Basil Krikelis said.
To buyer Karin Kirkland, also of Brandywine Hundred, who is shopping for a house for her daughter to live in, prices haven't fallen substantially.
"I would say it's a buyers' market, but you're not getting foreclosure prices," Kirkland said.
That could explain why houses sat on the market longer in 2007. The length of time houses sat on the market in New Castle and Kent counties increased 38 percent to an average of 55 days.
"They don't feel it's bottomed out, so they're waiting," said Susan Taylor, vice president and manager of the Prudential Fox & Roach Greenville office.
Buyers also are aware that prices have been dropping in Florida, Arizona, Nevada and most of California, Yun said.
In Delaware, inventories also ballooned last year. In December, there was a nearly two-year supply of homes available in Kent County. In New Castle County, there was a 10-month supply. A healthy supply is less than three months, said Steve Storti, senior vice president of marketing with Prudential Fox.
"I've never seen it like this. And you can't find a single reason for why the entire market is in such a nose dive. Historically, it's always been interest rates. This time, you've got to create a laundry list," said Jack Corrozi, owner of Jack Corrozi Builders of Newport and a home builder since 1974.
Corrozi said he believes the market has yet to hit bottom.
"Unfortunately, there's been a panic out there," Corrozi said.
Rate cut offers hope
Actions taken this week in Washington should help, Yun said. In the first emergency rate change since 2001, the Federal Reserve earlier this week lowered the benchmark rate by 0.75 percentage points to 3.5 percent. It was the single biggest interest-rate cut in 23 years. An economic stimulus plan also is being considered in Washington.
"The interest rates are just so attractive, it's going to entice people into the market," Yun said.
Also, discussions are under way about raising the limit on loans that Fannie Mae and Freddie Mac can purchase in the secondary market beyond the present limit of $417,000 to more than $700,000. This would put more capital into the so-called jumbo market, Yun said.
"There will be higher sales activity in the second half of the year than in the first half," Yun said.
Even before the Fed action, a decline in interest rates from last year has helped the market, Adelman said. In mid-July, a 30-year mortgage stood at 6.73 percent, according to Freddie Mac's primary mortgage market survey. On Jan. 24, the rate for a 30-year fixed was 5.48 percent.
"The government has to do something because right now the real estate market is at a standstill," Adelman said.
Thursday, January 24, 2008
Fed Cuts Rate 0.75 Percentage Point in Emergency Move
By Scott Lanman
Jan. 22 (Bloomberg) -- The Federal Reserve lowered its benchmark interest rate in an emergency move for the first time since 2001 after tumbling global stock markets and a jump in U.S.
unemployment threatened to push the economy into recession.
The central bank lowered the benchmark overnight lending rate to 3.5 percent from 4.25 percent, the Federal Open Market Committee said in a statement in Washington. Policy makers weren't scheduled to gather on rates until Jan. 29-30.
``While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate,'' the Fed said in a statement in Washington. The FOMC took the action ``in view of a weakening of the economic outlook and increasing downside risks to growth.''
Policy makers set aside concerns about inflation to lower borrowing costs for the fourth time since September after unemployment hit a two-year high and U.S. stocks slumped.
Chairman Ben S. Bernanke shifted the Fed's stance to a more- aggressive approach in remarks this month citing a need for ``decisive and timely'' action.
Yesterday, almost half of the world's biggest stock indexes fell into a bear market as mounting concern about a U.S.
recession dragged down banking and retail shares across Asia, Europe and Latin America. Today, futures pointed to the biggest decline in the Standard & Poor's 500 Index since September 2001.
Stock Reaction
U.S. stock-index futures pared their decline after the announcement, while surrendering some of those gains later.
Futures on the Standard & Poor's 500 stock index were down 3.4 percent at 8:30 a.m. in New York. They were down as much as 5.3 percent earlier.
The Fed Board of Governors, in a related move, lowered the so-called discount rate on direct loans to commercial banks by a
0.75 percentage point to 4 percent.
The FOMC vote was 8-1, with St. Louis Fed President William Poole preferring to wait until the regularly scheduled FOMC meeting. Fed Governor Frederic Mishkin was absent and not voting.
Today's so-called inter-meeting rate cut is the first since Sept. 17, 2001, when the Fed lowered borrowing costs in the aftermath of the terrorist attacks six days before. That was the third emergency reduction in a year which saw the last U.S.
recession.
Bernanke warned in a Jan. 10 speech and again in testimony to Congress Jan. 17 that the 2008 economic outlook had worsened and ``the downside risks to growth have become more pronounced.''
Still, he said the Fed wasn't forecasting a recession this year.
Economy Weakens
Retail sales fell last month, unemployment rose, and housing markets are mired in the worst slump in 16 years. Homebuilders broke ground on the fewest homes since 1991 last month, Commerce Department figures showed Jan. 17. Building permits, a sign of future construction, declined by the most in 12 years, suggesting the housing slump will deepen.
Bernanke told legislators at the House Budget Committee that banks were trying to protect asset quality and funding, and tightening credit conditions for the rest of the economy as a result. ``Banks have also evidently become more restrictive in their lending to firms and households,'' he said.
Fed policy makers have warned that housing will continue to be a damper on growth. Richmond Fed President Jeffrey Lacker said Jan. 18 that didn't expect homebuilding to ``bottom out'' in 2008. Bernanke said the day before that housing markets ``may continue to be a drag on growth for a good part of this year.''
In his Jan. 17 congressional testimony, Bernanke also endorsed the idea of a fiscal-stimulus package of as much as $150 billion to help revive economic growth, assuming the spending is quick and temporary. The next day, the Bush administration proposed a growth package of as much as $150 billion, without offering specifics.
Jan. 22 (Bloomberg) -- The Federal Reserve lowered its benchmark interest rate in an emergency move for the first time since 2001 after tumbling global stock markets and a jump in U.S.
unemployment threatened to push the economy into recession.
The central bank lowered the benchmark overnight lending rate to 3.5 percent from 4.25 percent, the Federal Open Market Committee said in a statement in Washington. Policy makers weren't scheduled to gather on rates until Jan. 29-30.
``While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate,'' the Fed said in a statement in Washington. The FOMC took the action ``in view of a weakening of the economic outlook and increasing downside risks to growth.''
Policy makers set aside concerns about inflation to lower borrowing costs for the fourth time since September after unemployment hit a two-year high and U.S. stocks slumped.
Chairman Ben S. Bernanke shifted the Fed's stance to a more- aggressive approach in remarks this month citing a need for ``decisive and timely'' action.
Yesterday, almost half of the world's biggest stock indexes fell into a bear market as mounting concern about a U.S.
recession dragged down banking and retail shares across Asia, Europe and Latin America. Today, futures pointed to the biggest decline in the Standard & Poor's 500 Index since September 2001.
Stock Reaction
U.S. stock-index futures pared their decline after the announcement, while surrendering some of those gains later.
Futures on the Standard & Poor's 500 stock index were down 3.4 percent at 8:30 a.m. in New York. They were down as much as 5.3 percent earlier.
The Fed Board of Governors, in a related move, lowered the so-called discount rate on direct loans to commercial banks by a
0.75 percentage point to 4 percent.
The FOMC vote was 8-1, with St. Louis Fed President William Poole preferring to wait until the regularly scheduled FOMC meeting. Fed Governor Frederic Mishkin was absent and not voting.
Today's so-called inter-meeting rate cut is the first since Sept. 17, 2001, when the Fed lowered borrowing costs in the aftermath of the terrorist attacks six days before. That was the third emergency reduction in a year which saw the last U.S.
recession.
Bernanke warned in a Jan. 10 speech and again in testimony to Congress Jan. 17 that the 2008 economic outlook had worsened and ``the downside risks to growth have become more pronounced.''
Still, he said the Fed wasn't forecasting a recession this year.
Economy Weakens
Retail sales fell last month, unemployment rose, and housing markets are mired in the worst slump in 16 years. Homebuilders broke ground on the fewest homes since 1991 last month, Commerce Department figures showed Jan. 17. Building permits, a sign of future construction, declined by the most in 12 years, suggesting the housing slump will deepen.
Bernanke told legislators at the House Budget Committee that banks were trying to protect asset quality and funding, and tightening credit conditions for the rest of the economy as a result. ``Banks have also evidently become more restrictive in their lending to firms and households,'' he said.
Fed policy makers have warned that housing will continue to be a damper on growth. Richmond Fed President Jeffrey Lacker said Jan. 18 that didn't expect homebuilding to ``bottom out'' in 2008. Bernanke said the day before that housing markets ``may continue to be a drag on growth for a good part of this year.''
In his Jan. 17 congressional testimony, Bernanke also endorsed the idea of a fiscal-stimulus package of as much as $150 billion to help revive economic growth, assuming the spending is quick and temporary. The next day, the Bush administration proposed a growth package of as much as $150 billion, without offering specifics.
EXISTING-HOME SALES RISE IN NOVEMBER, MARKET LIKELY STABILIZING
WASHINGTON (December 31, 2007) – Existing-home sales rose slightly in November, indicating a stabilization in housing in the wake of mortgage disruptions earlier this year, according to the National Association of Realtors®.
Total existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 0.4 percent to a seasonally adjusted annual rate1 of 5.00 million units in November from an upwardly revised pace of 4.98 million in October, but are 20.0 percent below the 6.25 million-unit level in November 2006.
Lawrence Yun, NAR chief economist, said the market appears to be stabilizing. “Near term, existing-home sales should continue to hover in a narrow range, just as they have since September, and that’s good news because it’ll be a further sign that the housing market is stabilizing,” he said. “Mortgage interest rates are near historic lows and the most current data shows decelerating price declines, along with a modest reduction in the number of homes on the market.” Disruptions in mortgage availability and pricing peaked in August, which caused sales to slow in subsequent months.
The national median existing-home price2 for all housing types was $210,200 in November, down 3.3 percent from November 2006 when the median was $217,300, but there remains a downward drag on the national median as the mix of closed sales has shifted away from expensive markets.
“Just like the weather, there are large local variations in home prices,” Yun said. A quarterly examination of price performance on a metropolitan basis shows nearly two-thirds of metro areas are showing price increases. Among the many metros experiencing healthy local price gains are Farmington, N.M.; Reading, Pa.; Columbia, S.C., and Fargo, N.D.
Total housing inventory declined 3.6 percent at the end of November to 4.27 million existing homes available for sale, which represents a 10.3-month supply3 at the current sales pace, down from a 10.7-month supply in October. “Inventory is still high, and further reduction in prices may be required in some areas to induce buyers back into the market,” Yun said.
NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said that Congress should expand affordable financing. “Consumers have some choices with safer conventional financing, but raising the limit on conforming loans would significantly revive home sales,” he said. “This would help creditworthy buyers in hard hit regions like California and Florida by greatly increasing access to low-interest-rate mortgages. NAR, as the leading advocate for homeownership, strongly urges lawmakers to act quickly on this important measure.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.21 percent in November from 6.38 percent in October; the rate was 6.24 percent in November 2006.
Single-family home sales rose 0.7 percent to a seasonally adjusted annual rate of 4.40 million in November from 4.37 million in October, but are 19.9 percent below the 5.49 million-unit pace in November 2006. The median existing single-family home price was $208,700 in November, down 3.7 percent from a year earlier.
Existing condominium and co-op sales slipped 1.6 percent to a seasonally adjusted annual rate of 600,000 units in November from 610,000 in October, and are 20.6 percent below the 756,000-unit level in November 2006. The median existing condo price4 was $221,100, down 0.7 percent from in November 2006.
Regionally, existing-home sales in the West increased 10.3 percent in November to a level of 960,000, but are 25.0 percent below a year ago. The median price in the West was $325,800, which is 6.8 percent lower than November 2006.
In the Midwest, existing-home sales were unchanged at an annual rate of 1.18 million in November, but are 16.9 percent below November 2006. The median price in the Midwest was $163,000, down 0.5 percent from a year ago.
Existing-home sales in the South declined 2.0 percent to an annual rate of 1.99 million in November, and are 19.4 percent below a year ago. The median price in the South was $174,200, which is 2.5 percent below November 2006.
Existing-home sales in the Northeast fell 3.3 percent to an annual pace of 870,000 in November, and are 19.4 percent below November 2006. The median price in the Northeast was $258,300, down 3.2 percent from a year ago.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
# # #
1The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
2The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the geographic composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
3 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases (e.g., condos were 9.5 percent of transactions in 1998, 8.5 percent in 1990 and only 6.1 percent in 1982).
4Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for December will be released January 24. The next Forecast / Pending Home Sales Index is scheduled for January 8.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.
Total existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 0.4 percent to a seasonally adjusted annual rate1 of 5.00 million units in November from an upwardly revised pace of 4.98 million in October, but are 20.0 percent below the 6.25 million-unit level in November 2006.
Lawrence Yun, NAR chief economist, said the market appears to be stabilizing. “Near term, existing-home sales should continue to hover in a narrow range, just as they have since September, and that’s good news because it’ll be a further sign that the housing market is stabilizing,” he said. “Mortgage interest rates are near historic lows and the most current data shows decelerating price declines, along with a modest reduction in the number of homes on the market.” Disruptions in mortgage availability and pricing peaked in August, which caused sales to slow in subsequent months.
The national median existing-home price2 for all housing types was $210,200 in November, down 3.3 percent from November 2006 when the median was $217,300, but there remains a downward drag on the national median as the mix of closed sales has shifted away from expensive markets.
“Just like the weather, there are large local variations in home prices,” Yun said. A quarterly examination of price performance on a metropolitan basis shows nearly two-thirds of metro areas are showing price increases. Among the many metros experiencing healthy local price gains are Farmington, N.M.; Reading, Pa.; Columbia, S.C., and Fargo, N.D.
Total housing inventory declined 3.6 percent at the end of November to 4.27 million existing homes available for sale, which represents a 10.3-month supply3 at the current sales pace, down from a 10.7-month supply in October. “Inventory is still high, and further reduction in prices may be required in some areas to induce buyers back into the market,” Yun said.
NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said that Congress should expand affordable financing. “Consumers have some choices with safer conventional financing, but raising the limit on conforming loans would significantly revive home sales,” he said. “This would help creditworthy buyers in hard hit regions like California and Florida by greatly increasing access to low-interest-rate mortgages. NAR, as the leading advocate for homeownership, strongly urges lawmakers to act quickly on this important measure.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.21 percent in November from 6.38 percent in October; the rate was 6.24 percent in November 2006.
Single-family home sales rose 0.7 percent to a seasonally adjusted annual rate of 4.40 million in November from 4.37 million in October, but are 19.9 percent below the 5.49 million-unit pace in November 2006. The median existing single-family home price was $208,700 in November, down 3.7 percent from a year earlier.
Existing condominium and co-op sales slipped 1.6 percent to a seasonally adjusted annual rate of 600,000 units in November from 610,000 in October, and are 20.6 percent below the 756,000-unit level in November 2006. The median existing condo price4 was $221,100, down 0.7 percent from in November 2006.
Regionally, existing-home sales in the West increased 10.3 percent in November to a level of 960,000, but are 25.0 percent below a year ago. The median price in the West was $325,800, which is 6.8 percent lower than November 2006.
In the Midwest, existing-home sales were unchanged at an annual rate of 1.18 million in November, but are 16.9 percent below November 2006. The median price in the Midwest was $163,000, down 0.5 percent from a year ago.
Existing-home sales in the South declined 2.0 percent to an annual rate of 1.99 million in November, and are 19.4 percent below a year ago. The median price in the South was $174,200, which is 2.5 percent below November 2006.
Existing-home sales in the Northeast fell 3.3 percent to an annual pace of 870,000 in November, and are 19.4 percent below November 2006. The median price in the Northeast was $258,300, down 3.2 percent from a year ago.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
# # #
1The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
2The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the geographic composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
3 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases (e.g., condos were 9.5 percent of transactions in 1998, 8.5 percent in 1990 and only 6.1 percent in 1982).
4Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for December will be released January 24. The next Forecast / Pending Home Sales Index is scheduled for January 8.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.
EXISTING-HOME SALES RISE IN NOVEMBER, MARKET LIKELY STABILIZING
WASHINGTON (December 31, 2007) – Existing-home sales rose slightly in November, indicating a stabilization in housing in the wake of mortgage disruptions earlier this year, according to the National Association of Realtors®.
Total existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 0.4 percent to a seasonally adjusted annual rate1 of 5.00 million units in November from an upwardly revised pace of 4.98 million in October, but are 20.0 percent below the 6.25 million-unit level in November 2006.
Lawrence Yun, NAR chief economist, said the market appears to be stabilizing. “Near term, existing-home sales should continue to hover in a narrow range, just as they have since September, and that’s good news because it’ll be a further sign that the housing market is stabilizing,” he said. “Mortgage interest rates are near historic lows and the most current data shows decelerating price declines, along with a modest reduction in the number of homes on the market.” Disruptions in mortgage availability and pricing peaked in August, which caused sales to slow in subsequent months.
The national median existing-home price2 for all housing types was $210,200 in November, down 3.3 percent from November 2006 when the median was $217,300, but there remains a downward drag on the national median as the mix of closed sales has shifted away from expensive markets.
“Just like the weather, there are large local variations in home prices,” Yun said. A quarterly examination of price performance on a metropolitan basis shows nearly two-thirds of metro areas are showing price increases. Among the many metros experiencing healthy local price gains are Farmington, N.M.; Reading, Pa.; Columbia, S.C., and Fargo, N.D.
Total housing inventory declined 3.6 percent at the end of November to 4.27 million existing homes available for sale, which represents a 10.3-month supply3 at the current sales pace, down from a 10.7-month supply in October. “Inventory is still high, and further reduction in prices may be required in some areas to induce buyers back into the market,” Yun said.
NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said that Congress should expand affordable financing. “Consumers have some choices with safer conventional financing, but raising the limit on conforming loans would significantly revive home sales,” he said. “This would help creditworthy buyers in hard hit regions like California and Florida by greatly increasing access to low-interest-rate mortgages. NAR, as the leading advocate for homeownership, strongly urges lawmakers to act quickly on this important measure.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.21 percent in November from 6.38 percent in October; the rate was 6.24 percent in November 2006.
Single-family home sales rose 0.7 percent to a seasonally adjusted annual rate of 4.40 million in November from 4.37 million in October, but are 19.9 percent below the 5.49 million-unit pace in November 2006. The median existing single-family home price was $208,700 in November, down 3.7 percent from a year earlier.
Existing condominium and co-op sales slipped 1.6 percent to a seasonally adjusted annual rate of 600,000 units in November from 610,000 in October, and are 20.6 percent below the 756,000-unit level in November 2006. The median existing condo price4 was $221,100, down 0.7 percent from in November 2006.
Regionally, existing-home sales in the West increased 10.3 percent in November to a level of 960,000, but are 25.0 percent below a year ago. The median price in the West was $325,800, which is 6.8 percent lower than November 2006.
In the Midwest, existing-home sales were unchanged at an annual rate of 1.18 million in November, but are 16.9 percent below November 2006. The median price in the Midwest was $163,000, down 0.5 percent from a year ago.
Existing-home sales in the South declined 2.0 percent to an annual rate of 1.99 million in November, and are 19.4 percent below a year ago. The median price in the South was $174,200, which is 2.5 percent below November 2006.
Existing-home sales in the Northeast fell 3.3 percent to an annual pace of 870,000 in November, and are 19.4 percent below November 2006. The median price in the Northeast was $258,300, down 3.2 percent from a year ago.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
# # #
1The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
2The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the geographic composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
3 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases (e.g., condos were 9.5 percent of transactions in 1998, 8.5 percent in 1990 and only 6.1 percent in 1982).
4Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for December will be released January 24. The next Forecast / Pending Home Sales Index is scheduled for January 8.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.
Total existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 0.4 percent to a seasonally adjusted annual rate1 of 5.00 million units in November from an upwardly revised pace of 4.98 million in October, but are 20.0 percent below the 6.25 million-unit level in November 2006.
Lawrence Yun, NAR chief economist, said the market appears to be stabilizing. “Near term, existing-home sales should continue to hover in a narrow range, just as they have since September, and that’s good news because it’ll be a further sign that the housing market is stabilizing,” he said. “Mortgage interest rates are near historic lows and the most current data shows decelerating price declines, along with a modest reduction in the number of homes on the market.” Disruptions in mortgage availability and pricing peaked in August, which caused sales to slow in subsequent months.
The national median existing-home price2 for all housing types was $210,200 in November, down 3.3 percent from November 2006 when the median was $217,300, but there remains a downward drag on the national median as the mix of closed sales has shifted away from expensive markets.
“Just like the weather, there are large local variations in home prices,” Yun said. A quarterly examination of price performance on a metropolitan basis shows nearly two-thirds of metro areas are showing price increases. Among the many metros experiencing healthy local price gains are Farmington, N.M.; Reading, Pa.; Columbia, S.C., and Fargo, N.D.
Total housing inventory declined 3.6 percent at the end of November to 4.27 million existing homes available for sale, which represents a 10.3-month supply3 at the current sales pace, down from a 10.7-month supply in October. “Inventory is still high, and further reduction in prices may be required in some areas to induce buyers back into the market,” Yun said.
NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said that Congress should expand affordable financing. “Consumers have some choices with safer conventional financing, but raising the limit on conforming loans would significantly revive home sales,” he said. “This would help creditworthy buyers in hard hit regions like California and Florida by greatly increasing access to low-interest-rate mortgages. NAR, as the leading advocate for homeownership, strongly urges lawmakers to act quickly on this important measure.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.21 percent in November from 6.38 percent in October; the rate was 6.24 percent in November 2006.
Single-family home sales rose 0.7 percent to a seasonally adjusted annual rate of 4.40 million in November from 4.37 million in October, but are 19.9 percent below the 5.49 million-unit pace in November 2006. The median existing single-family home price was $208,700 in November, down 3.7 percent from a year earlier.
Existing condominium and co-op sales slipped 1.6 percent to a seasonally adjusted annual rate of 600,000 units in November from 610,000 in October, and are 20.6 percent below the 756,000-unit level in November 2006. The median existing condo price4 was $221,100, down 0.7 percent from in November 2006.
Regionally, existing-home sales in the West increased 10.3 percent in November to a level of 960,000, but are 25.0 percent below a year ago. The median price in the West was $325,800, which is 6.8 percent lower than November 2006.
In the Midwest, existing-home sales were unchanged at an annual rate of 1.18 million in November, but are 16.9 percent below November 2006. The median price in the Midwest was $163,000, down 0.5 percent from a year ago.
Existing-home sales in the South declined 2.0 percent to an annual rate of 1.99 million in November, and are 19.4 percent below a year ago. The median price in the South was $174,200, which is 2.5 percent below November 2006.
Existing-home sales in the Northeast fell 3.3 percent to an annual pace of 870,000 in November, and are 19.4 percent below November 2006. The median price in the Northeast was $258,300, down 3.2 percent from a year ago.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.
# # #
1The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
2The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the geographic composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
3 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases (e.g., condos were 9.5 percent of transactions in 1998, 8.5 percent in 1990 and only 6.1 percent in 1982).
4Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Existing-home sales for December will be released January 24. The next Forecast / Pending Home Sales Index is scheduled for January 8.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data in this release, other tables and surveys also may be found by clicking on Research.
Thursday, January 17, 2008
Beach to Bay Real Estate Center's New Homes Showroom
Contributed by Beach To Bay Real Estate Center
Posted Tuesday, January 15, 2008 at 5:55 pm
Beach To Bay Real Estate Center Director of Marketing & Technology, Jay King, is currently updating marketing materials for developments in Sussex and lower Kent counties that are offered through Beach to Bay Real Estate Center's New Homes Showroom. If you are already a participating Builder and have some new pricing/incentive or related information, please forward it to, or drop off the information at the Beach To Bay Real Estate Center, located at 17316 Coastal Highway, Lewes, DE 19958.
“We are attempting to contact our Builders to update any price/incentive information regarding their developments for the upcoming 2008 selling season. By updating your marketing materials, our representatives will be supplying new home prospects with the most current information available”, said King.
“In addition, any Builder who is not represented in the Showroom is certainly welcome to join the group by supply us with current marketing materials for the use in the showroom.”
The New Homes Showroom is the only all-inclusive, resource and information center in the state; is a Regal Award winner (Best Showroom) and is open daily to the public. It is a free tool for Builders to showcase and market their developments; is buyer-friendly and targets qualified people looking for new construction in Sussex and lower Kent counties.
The facility offers a contemporary, professional and non-competitive environment to conduct and close real estate transactions; The Company provides licensed, educated Realtors to assist prospects in defining a community lifestyle and subsequently narrowing the buyers’ search for a new home.
The Showroom maintains and inventory of Single Family, Townhomes/Condos, 55+ and Golf Community brochures on site and includes information on Lots & Land, Custom Builders and Consumer Services in easy to navigate “stations” within the Showroom. It is also open to all licensed Realtors and is available for seminars, classes and the release of new developments.
For more information, call Jay King, Director of Marketing & Technology at 302-644-3130 or email jamesk@beachtobayrec.com.
Posted Tuesday, January 15, 2008 at 5:55 pm
Beach To Bay Real Estate Center Director of Marketing & Technology, Jay King, is currently updating marketing materials for developments in Sussex and lower Kent counties that are offered through Beach to Bay Real Estate Center's New Homes Showroom. If you are already a participating Builder and have some new pricing/incentive or related information, please forward it to, or drop off the information at the Beach To Bay Real Estate Center, located at 17316 Coastal Highway, Lewes, DE 19958.
“We are attempting to contact our Builders to update any price/incentive information regarding their developments for the upcoming 2008 selling season. By updating your marketing materials, our representatives will be supplying new home prospects with the most current information available”, said King.
“In addition, any Builder who is not represented in the Showroom is certainly welcome to join the group by supply us with current marketing materials for the use in the showroom.”
The New Homes Showroom is the only all-inclusive, resource and information center in the state; is a Regal Award winner (Best Showroom) and is open daily to the public. It is a free tool for Builders to showcase and market their developments; is buyer-friendly and targets qualified people looking for new construction in Sussex and lower Kent counties.
The facility offers a contemporary, professional and non-competitive environment to conduct and close real estate transactions; The Company provides licensed, educated Realtors to assist prospects in defining a community lifestyle and subsequently narrowing the buyers’ search for a new home.
The Showroom maintains and inventory of Single Family, Townhomes/Condos, 55+ and Golf Community brochures on site and includes information on Lots & Land, Custom Builders and Consumer Services in easy to navigate “stations” within the Showroom. It is also open to all licensed Realtors and is available for seminars, classes and the release of new developments.
For more information, call Jay King, Director of Marketing & Technology at 302-644-3130 or email jamesk@beachtobayrec.com.
Are you Ready to Buy a New Home?
Are you ready to own?
In Lesson 8
How much house can you afford?
Glossary
Take
the test
Top things to know
Are you ready to own?
Setting your budget
Picking a team
The hunt
Closing the deal
For sellers only
Mortgage Home equity loan Overnight avgs
30 yr fixed mtg 5.42%
15 yr fixed mtg 4.93%
30 yr fixed jumbo mtg 6.47%
5/1 ARM 5.14%
5/1 jumbo ARM 5.63%
Find personalized rates:
$30K HELOC 7.40%
$50K HELOC 7.24%
$30K Home Eq 8.23%
$50K Home Eq 8.14%
$75K Home Eq 7.85%
Find personalized rates:
Provided by
text ads here
Money 101 Lessons
Setting priorities
Making a budget
Basics of banking and saving
Basics of investing
Investing in stocks
Investing in mutual funds
Investing in bonds
Buying a home
Controlling debt
Employee stock options
Saving for college
Kids and money
Planning for retirement
Asset allocation
Hiring financial help
Health insurance
Buying a car
Taxes
Home insurance
Life insurance
Estate planning
Auto insurance
401(k)s
Home ownership means you no longer pay monthly rent for the roof over your head. You can do what you want with your house (within reason). When you leave, you can sell it to recoup the purchase price and - with any luck - earn a profit too.
But don't kid yourself. home ownership comes with a slew of disadvantages, responsibilities, and downright headaches.
So before going any further, consider whether your lifestyle and finances make homebuying a smart move.
TIP: High costs mean you should be prepared to say put. Except in a roaring real estate market, it usually doesn't make sense to buy a home you'll own for less than three or four years. Reason: the high transaction cost of buying and selling property means you could lose money on the deal. If you do make money, you'll pay capital gains taxes if you're in the house less than two years.
So ask yourself if you can really stay put for that long. Will you need to move because you are transferred by your current employer or a new one? Are you thinking of going back to school?
TIP: It may make more sense to rent On the financial side, one key question is whether it costs more, on average, to rent or own in your area. The rule of thumb is that if you pay 35 percent less in rent than you would for owning - including the monthly mortgage, property taxes, and any homeowner's fees - then it's smarter to continue renting.
Only if all those answers still point towards owning should you proceed to the next step - getting the money right.
In Lesson 8
How much house can you afford?
Glossary
Take
the test
Top things to know
Are you ready to own?
Setting your budget
Picking a team
The hunt
Closing the deal
For sellers only
Mortgage Home equity loan Overnight avgs
30 yr fixed mtg 5.42%
15 yr fixed mtg 4.93%
30 yr fixed jumbo mtg 6.47%
5/1 ARM 5.14%
5/1 jumbo ARM 5.63%
Find personalized rates:
$30K HELOC 7.40%
$50K HELOC 7.24%
$30K Home Eq 8.23%
$50K Home Eq 8.14%
$75K Home Eq 7.85%
Find personalized rates:
Provided by
text ads here
Money 101 Lessons
Setting priorities
Making a budget
Basics of banking and saving
Basics of investing
Investing in stocks
Investing in mutual funds
Investing in bonds
Buying a home
Controlling debt
Employee stock options
Saving for college
Kids and money
Planning for retirement
Asset allocation
Hiring financial help
Health insurance
Buying a car
Taxes
Home insurance
Life insurance
Estate planning
Auto insurance
401(k)s
Home ownership means you no longer pay monthly rent for the roof over your head. You can do what you want with your house (within reason). When you leave, you can sell it to recoup the purchase price and - with any luck - earn a profit too.
But don't kid yourself. home ownership comes with a slew of disadvantages, responsibilities, and downright headaches.
So before going any further, consider whether your lifestyle and finances make homebuying a smart move.
TIP: High costs mean you should be prepared to say put. Except in a roaring real estate market, it usually doesn't make sense to buy a home you'll own for less than three or four years. Reason: the high transaction cost of buying and selling property means you could lose money on the deal. If you do make money, you'll pay capital gains taxes if you're in the house less than two years.
So ask yourself if you can really stay put for that long. Will you need to move because you are transferred by your current employer or a new one? Are you thinking of going back to school?
TIP: It may make more sense to rent On the financial side, one key question is whether it costs more, on average, to rent or own in your area. The rule of thumb is that if you pay 35 percent less in rent than you would for owning - including the monthly mortgage, property taxes, and any homeowner's fees - then it's smarter to continue renting.
Only if all those answers still point towards owning should you proceed to the next step - getting the money right.
Tips on Buying a New Home
1. Don't buy if you can't stay put.
If you can't commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner.
2. Start by shoring up your credit.
Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.
3. Aim for a home you can really afford.
The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.
4. Don't worry if you can't put down the usual 20 percent.
There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a down payment as small as 3 percent of the purchase price.
5. Buy in a district with good schools.
In most areas, this advice applies even if you don't have school-age children. Reason: When it comes time to sell, you'll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.
6. Get professional help.
Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.
7. Choose carefully between points and rate.
When picking a mortgage, you usually have the option of paying additional points -- a portion of the interest that you pay at closing -- in exchange for a lower interest rate. If you stay in the house for a long time -- say five to seven years or more -- it's usually a better deal to take the points. The lower interest rate will save you more in the long run.
8. Before house hunting, get pre-approved.
Getting pre-approved will you save yourself the grief of looking at houses you can't afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.
9. Do your homework before bidding.
Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that's about eight to 10 percent lower than what the seller is asking.
10. Hire a home inspector.
Sure, your lender will require a home appraisal anyway. But that's just the bank's way of determining whether the house is worth the price you've agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.
If you can't commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner.
2. Start by shoring up your credit.
Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.
3. Aim for a home you can really afford.
The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.
4. Don't worry if you can't put down the usual 20 percent.
There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a down payment as small as 3 percent of the purchase price.
5. Buy in a district with good schools.
In most areas, this advice applies even if you don't have school-age children. Reason: When it comes time to sell, you'll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.
6. Get professional help.
Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.
7. Choose carefully between points and rate.
When picking a mortgage, you usually have the option of paying additional points -- a portion of the interest that you pay at closing -- in exchange for a lower interest rate. If you stay in the house for a long time -- say five to seven years or more -- it's usually a better deal to take the points. The lower interest rate will save you more in the long run.
8. Before house hunting, get pre-approved.
Getting pre-approved will you save yourself the grief of looking at houses you can't afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.
9. Do your homework before bidding.
Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that's about eight to 10 percent lower than what the seller is asking.
10. Hire a home inspector.
Sure, your lender will require a home appraisal anyway. But that's just the bank's way of determining whether the house is worth the price you've agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.
Mortgage rates sink on weak economic data
Disappointing jobs report, slow service sector growth sent mortgage rates lower this week; refinancing activity rises, Freddie Mac reports.
EMAIL | PRINT | DIGG | RSS Subscribe to Real Estate
feed://rss.cnn.com/rss/money_realestate.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) January 10 2008: 10:59 AM EST
Current Mortgage Rates
Type Overall avgs
30 yr fixed mtg 5.42%
15 yr fixed mtg 4.93%
30 yr fixed jumbo mtg 6.47%
5/1 ARM 5.14%
5/1 jumbo ARM 5.63%
Find personalized rates:
NEW YORK (CNNMoney.com) -- Mortgage rates dropped this week on weak economic data, sending refinancing activity higher, Freddie Mac reported Thursday.
The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 5.87 percent for the week ending Jan. 10, down from 6.07 percent last week.
At this time last year, the 30-year fixed-rate mortgage averaged 6.21 percent.
Unemployment jumped to a two-year high of 5 percent in December and the service sector saw the slowest expansion in nine months, noted Frank Nothaft, Freddie Mac (FRE, Fortune 500) vice president and chief economist in a statement Thursday.
Additionally, the National Association of Realtors suggested a drop in pending home sales for November signaled a possible slowdown in December.
"As a result, mortgage rates came down across the board, with 30-year fixed mortgage rates at their lowest level in more than two years," Nothaft said.
"Because average mortgage rates have come down more than a quarter of a percentage point in the past two weeks, there has been a pickup in refinance activity as borrowers take advantage of the lower rates," he added.
Home sales sink, outlook darkens
Freddie Mac said 15-year fixed-rate loans averaged 5.43 percent, down from 5.68 percent last week. A year ago, the 15-year rate averaged 5.96 percent.
Five-year adjustable-rate mortgages (ARMs) averaged 5.63 percent this week, down from 5.78 percent last week. A year ago, the 5-year rate averaged 6.03 percent.
One-year Treasury-indexed ARMs averaged 5.37 percent, down from 5.47 percent last week. At this time last year, the 1-year ARM averaged 5.44 percent.
Recession may already be here
Ex-Fannie boss fingers White House
Find mortgage rates in your area.
EMAIL | PRINT | DIGG | RSS Subscribe to Real Estate
feed://rss.cnn.com/rss/money_realestate.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) January 10 2008: 10:59 AM EST
Current Mortgage Rates
Type Overall avgs
30 yr fixed mtg 5.42%
15 yr fixed mtg 4.93%
30 yr fixed jumbo mtg 6.47%
5/1 ARM 5.14%
5/1 jumbo ARM 5.63%
Find personalized rates:
NEW YORK (CNNMoney.com) -- Mortgage rates dropped this week on weak economic data, sending refinancing activity higher, Freddie Mac reported Thursday.
The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 5.87 percent for the week ending Jan. 10, down from 6.07 percent last week.
At this time last year, the 30-year fixed-rate mortgage averaged 6.21 percent.
Unemployment jumped to a two-year high of 5 percent in December and the service sector saw the slowest expansion in nine months, noted Frank Nothaft, Freddie Mac (FRE, Fortune 500) vice president and chief economist in a statement Thursday.
Additionally, the National Association of Realtors suggested a drop in pending home sales for November signaled a possible slowdown in December.
"As a result, mortgage rates came down across the board, with 30-year fixed mortgage rates at their lowest level in more than two years," Nothaft said.
"Because average mortgage rates have come down more than a quarter of a percentage point in the past two weeks, there has been a pickup in refinance activity as borrowers take advantage of the lower rates," he added.
Home sales sink, outlook darkens
Freddie Mac said 15-year fixed-rate loans averaged 5.43 percent, down from 5.68 percent last week. A year ago, the 15-year rate averaged 5.96 percent.
Five-year adjustable-rate mortgages (ARMs) averaged 5.63 percent this week, down from 5.78 percent last week. A year ago, the 5-year rate averaged 6.03 percent.
One-year Treasury-indexed ARMs averaged 5.37 percent, down from 5.47 percent last week. At this time last year, the 1-year ARM averaged 5.44 percent.
Recession may already be here
Ex-Fannie boss fingers White House
Find mortgage rates in your area.
Builders' confidence edges up from record low
Most builders still see weak housing market, but there are signs of hope for the not so distant future.
EMAIL | PRINT | DIGG | RSS Subscribe to Economy
feed://rss.cnn.com/rss/money_news_economy.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) By Chris Isidore, CNNMoney.com senior writer
January 17 2008: 5:26 AM EST
Video
More video
National Association of Homebuilders Jerry Howard says the trade group is looking for improvement in 2008.
Play video
--------------------------------------------------------------------------------
Goldman Sachs analyst Jan Hatzius says a recession and a more serious downturn in the housing market are on the horizon.
Play video
Current Mortgage Rates
Type Overall avgs
30 yr fixed mtg 5.42%
15 yr fixed mtg 4.93%
30 yr fixed jumbo mtg 6.47%
5/1 ARM 5.14%
5/1 jumbo ARM 5.63%
Find personalized rates:
Special Reportfull coverage
Mortgage meltdown: Now the rents
Builders' confidence edges up from record low
Cleveland sues lenders over subprime
Housing: No room for bulls
NEW YORK (CNNMoney.com) -- Home builders' confidence showed a very slight improvement in January, helped by a narrow gain in their hopes for the market early this summer, according to the latest survey.
But despite that glimmer of hope, their overall outlook is still near the recent record lows.
The National Association of Home Builders/Well Fargo index had a 19 reading in January, up slightly from the downwardly revised December reading of 18, a record low. The index is based upon three subindexes that measure their view of current market conditions, outlook for six months down the road and the level of buyer traffic.
Builders' view of the market for single family homes six months from now was responsible for most of the index's narrow gain. The reading rose to 28 from 26, the second straight month of a two-point gain in that measure.
Just over half of those surveyed still expect a poor housing market in six months, although that's down from the 57 percent who felt that way in December.
The index's reading on the current market condition stayed unchanged at 19, just above the record low of 18 reached in the October and November surveys. More than two out of three builders surveyed believe the current market conditions are poor.
But their view of current buyer traffic did show a narrow gain, rising to 14 from the record low of 13 reached in December, although three out of four said the level of traffic was either low or very low.
"Builders are taking a realistic view of the continuing housing market correction and doing what they should to get inventories under control and restore greater balance to the supply and demand equation," noted NAHB President Brian Catalde, a home builder from El Segundo, Calif.
The report comes the day before the government report on housing starts and building permits is released. Economists surveyed by Briefing.com forecast that both readings are expected to fall once again to levels that would represent 14-year lows.
The weak market for housing and home building has become a major drag on the U.S. economy and raised fears that it could help to bring on a recession early this year, if such a downturn hasn't already begun.
That weakness has also hammered at the results of the nation's largest builders. A week ago KB Home (KBH, Fortune 500), the nation's No. 5 builder by revenue, reported a fiscal fourth quarter loss that was nearly 10 times worse than forecasts, as CEO Jeff Mezger told investors during a conference call that "As we enter 2008, we see no indication markets are stabilizing."
Lennar (LEN, Fortune 500), the nation's No. 1 home builder, is forecast to report a large increase in fiscal fourth quarter losses when it releases results Jan. 24. Those losses are forecast to continue throughout this fiscal year as well. Analysts are looking for No. 6 builder Hovnanian Enterprises (HOV, Fortune 500) to post losses in both fiscal 2008 and 2009.
Analysts are also forecasting that No. 2 Centex (CTX, Fortune 500), No. 3 D.R. Horton (DHI, Fortune 500) and No. 4 Pulte Homes (PHM, Fortune 500) are going to report continuing losses until at least their final quarters of this calendar year.
The builder with the forecast of the quickest return to profits is luxury home builder Toll Brothers (TOL, Fortune 500), seen as posting a narrow gain in the quarter ending in July. It posted its first loss as a public company in its most recent period, which ended in October.
EMAIL | PRINT | DIGG | RSS Subscribe to Economy
feed://rss.cnn.com/rss/money_news_economy.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) By Chris Isidore, CNNMoney.com senior writer
January 17 2008: 5:26 AM EST
Video
More video
National Association of Homebuilders Jerry Howard says the trade group is looking for improvement in 2008.
Play video
--------------------------------------------------------------------------------
Goldman Sachs analyst Jan Hatzius says a recession and a more serious downturn in the housing market are on the horizon.
Play video
Current Mortgage Rates
Type Overall avgs
30 yr fixed mtg 5.42%
15 yr fixed mtg 4.93%
30 yr fixed jumbo mtg 6.47%
5/1 ARM 5.14%
5/1 jumbo ARM 5.63%
Find personalized rates:
Special Reportfull coverage
Mortgage meltdown: Now the rents
Builders' confidence edges up from record low
Cleveland sues lenders over subprime
Housing: No room for bulls
NEW YORK (CNNMoney.com) -- Home builders' confidence showed a very slight improvement in January, helped by a narrow gain in their hopes for the market early this summer, according to the latest survey.
But despite that glimmer of hope, their overall outlook is still near the recent record lows.
The National Association of Home Builders/Well Fargo index had a 19 reading in January, up slightly from the downwardly revised December reading of 18, a record low. The index is based upon three subindexes that measure their view of current market conditions, outlook for six months down the road and the level of buyer traffic.
Builders' view of the market for single family homes six months from now was responsible for most of the index's narrow gain. The reading rose to 28 from 26, the second straight month of a two-point gain in that measure.
Just over half of those surveyed still expect a poor housing market in six months, although that's down from the 57 percent who felt that way in December.
The index's reading on the current market condition stayed unchanged at 19, just above the record low of 18 reached in the October and November surveys. More than two out of three builders surveyed believe the current market conditions are poor.
But their view of current buyer traffic did show a narrow gain, rising to 14 from the record low of 13 reached in December, although three out of four said the level of traffic was either low or very low.
"Builders are taking a realistic view of the continuing housing market correction and doing what they should to get inventories under control and restore greater balance to the supply and demand equation," noted NAHB President Brian Catalde, a home builder from El Segundo, Calif.
The report comes the day before the government report on housing starts and building permits is released. Economists surveyed by Briefing.com forecast that both readings are expected to fall once again to levels that would represent 14-year lows.
The weak market for housing and home building has become a major drag on the U.S. economy and raised fears that it could help to bring on a recession early this year, if such a downturn hasn't already begun.
That weakness has also hammered at the results of the nation's largest builders. A week ago KB Home (KBH, Fortune 500), the nation's No. 5 builder by revenue, reported a fiscal fourth quarter loss that was nearly 10 times worse than forecasts, as CEO Jeff Mezger told investors during a conference call that "As we enter 2008, we see no indication markets are stabilizing."
Lennar (LEN, Fortune 500), the nation's No. 1 home builder, is forecast to report a large increase in fiscal fourth quarter losses when it releases results Jan. 24. Those losses are forecast to continue throughout this fiscal year as well. Analysts are looking for No. 6 builder Hovnanian Enterprises (HOV, Fortune 500) to post losses in both fiscal 2008 and 2009.
Analysts are also forecasting that No. 2 Centex (CTX, Fortune 500), No. 3 D.R. Horton (DHI, Fortune 500) and No. 4 Pulte Homes (PHM, Fortune 500) are going to report continuing losses until at least their final quarters of this calendar year.
The builder with the forecast of the quickest return to profits is luxury home builder Toll Brothers (TOL, Fortune 500), seen as posting a narrow gain in the quarter ending in July. It posted its first loss as a public company in its most recent period, which ended in October.
Mortgage lending forecast to drop
Previously owned home sales are also expected to fall as banks rack up billions in losses, according to the Mortgage Bankers Association.
EMAIL | PRINT | DIGG | RSS Subscribe to Real Estate
feed://rss.cnn.com/rss/money_realestate.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) January 14 2008: 2:04 PM EST
Video
More video
Bank of America purchases Countrywide Financial, one of the companies hardest hit by the subprime mortgage meltdown.
Play video
WASHINGTON (AP) -- U.S. mortgage lending will fall by more than 16 percent this year, dragged down by a worsening economy and a slumping mortgage market, an industry group predicted Monday.
The Mortgage Bankers Association forecast that U.S. mortgage lending will fall 16.2 percent this year to $1.96 trillion, down from a projected $2.34 trillion last year.
The group also said sales of previously owned U.S. homes will drop by about 13 percent, while median prices fall about 2 percent. New mortgage lending would continue its downward descent in 2009, the group predicted, but home sales and prices would steady a bit.
Subprime lender to file for bankruptcy
Home loan defaults slammed lenders last year. Wall Street banks have posted tens of billions in mortgage-related losses, and traders worry Merrill Lynch & Co. (MER, Fortune 500), Citigroup (C, Fortune 500) and JPMorgan Chase & Co (JPM, Fortune 500). will announce more losses when they report fourth-quarter earnings this week.
With defaults piling up, lenders have turned away from mortgages packaged and sold to investors and back to loans held on their books and those sold to Fannie Mae (FNM) and Freddie Mac (FRE, Fortune 500), the government-sponsored mortgage companies.
Doug Duncan, the trade group's chief economist, said in a statement that banks are strong enough to keep making mortgage loans. A recovery "may take longer this time than it has in past financial crises, but a turn for the better still appears to be a good bet later in the year," he said.
Duncan's predictions for the housing market are far gloomier than the National Association of Realtors, the trade group for real estate agents.
He predicts that existing home sales will drop by about 13 percent this year to 4.94 million before rebounding by about 4 percent in 2009. The Realtors group is forecasting about 5.7 million existing home sales, up slightly from last year.
Bad bank earnings: Prepare for the flood
China may block $2B Citi deal - report
Find mortgage rates in your area.
EMAIL | PRINT | DIGG | RSS Subscribe to Real Estate
feed://rss.cnn.com/rss/money_realestate.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) January 14 2008: 2:04 PM EST
Video
More video
Bank of America purchases Countrywide Financial, one of the companies hardest hit by the subprime mortgage meltdown.
Play video
WASHINGTON (AP) -- U.S. mortgage lending will fall by more than 16 percent this year, dragged down by a worsening economy and a slumping mortgage market, an industry group predicted Monday.
The Mortgage Bankers Association forecast that U.S. mortgage lending will fall 16.2 percent this year to $1.96 trillion, down from a projected $2.34 trillion last year.
The group also said sales of previously owned U.S. homes will drop by about 13 percent, while median prices fall about 2 percent. New mortgage lending would continue its downward descent in 2009, the group predicted, but home sales and prices would steady a bit.
Subprime lender to file for bankruptcy
Home loan defaults slammed lenders last year. Wall Street banks have posted tens of billions in mortgage-related losses, and traders worry Merrill Lynch & Co. (MER, Fortune 500), Citigroup (C, Fortune 500) and JPMorgan Chase & Co (JPM, Fortune 500). will announce more losses when they report fourth-quarter earnings this week.
With defaults piling up, lenders have turned away from mortgages packaged and sold to investors and back to loans held on their books and those sold to Fannie Mae (FNM) and Freddie Mac (FRE, Fortune 500), the government-sponsored mortgage companies.
Doug Duncan, the trade group's chief economist, said in a statement that banks are strong enough to keep making mortgage loans. A recovery "may take longer this time than it has in past financial crises, but a turn for the better still appears to be a good bet later in the year," he said.
Duncan's predictions for the housing market are far gloomier than the National Association of Realtors, the trade group for real estate agents.
He predicts that existing home sales will drop by about 13 percent this year to 4.94 million before rebounding by about 4 percent in 2009. The Realtors group is forecasting about 5.7 million existing home sales, up slightly from last year.
Bad bank earnings: Prepare for the flood
China may block $2B Citi deal - report
Find mortgage rates in your area.
Mortgage meltdown: ARMs on the wane
Delinquency increases in 2007 caused the number of adjustable-rate mortgages issued last year to decrease, according to Freddie Mac
EMAIL | PRINT | DIGG | RSS Subscribe to Real Estate
feed://rss.cnn.com/rss/money_realestate.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) January 15 2008: 1:19 PM EST
Video
More video
Real estate sell offs increase, but Bank of America's deal to buy Countrywide may be good news for some borrowers.
Play video
NEW YORK (CNNMoney.com) -- The number of adjustable-rate mortgages issued by lenders declined in 2007 as loan delinquencies and economic problems took their toll on interest rate discounts, according to Freddie Mac's annual ARM survey.
As of October 2007, the government-sponsored loan buyer said, ARMs made up 17 percent of loan applications, their lowest level since June 2003.
Over the past year, delinquency rates on ARMs surpassed those of fixed rate mortgages, according to Freddie's chief economist Frank Nothaft. Rates hit 3.1 percent in September, as opposed to the 0.8 percent delinquency rate of prime fixed-rate loans.
Foreclosures reach record high
Many of those ARMs had low introductory teaser rates that reset to payments that homeowners could no longer afford. And as teaser rates rose, the loans became less attractive to potential borrowers.
"A year ago, the initial-rate discount on the popular 3/1 and 5/1 hybrid products was about 1.8 percentage points. In our latest survey, the rate discount had virtually disappeared on these products," said Nothaft in a statement.
According to Freddie Mac (FRE, Fortune 500), hybrid ARMs that contain an initial fixed-rate period of five years remain popular with families who intend to maintain their mortgage for five years or less. Five year hybrid ARM rates run about 0.1 percent below those of a 30-year fixed-rate mortgage.
"As ARMs became more expensive relative to fixed-rate loans during the closing months of 2007, the ARM share of lending declined," he said.
Mortgage rates sink on weak economic data
Housing: no room for bulls
Find mortgage rates in your area.
EMAIL | PRINT | DIGG | RSS Subscribe to Real Estate
feed://rss.cnn.com/rss/money_realestate.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) January 15 2008: 1:19 PM EST
Video
More video
Real estate sell offs increase, but Bank of America's deal to buy Countrywide may be good news for some borrowers.
Play video
NEW YORK (CNNMoney.com) -- The number of adjustable-rate mortgages issued by lenders declined in 2007 as loan delinquencies and economic problems took their toll on interest rate discounts, according to Freddie Mac's annual ARM survey.
As of October 2007, the government-sponsored loan buyer said, ARMs made up 17 percent of loan applications, their lowest level since June 2003.
Over the past year, delinquency rates on ARMs surpassed those of fixed rate mortgages, according to Freddie's chief economist Frank Nothaft. Rates hit 3.1 percent in September, as opposed to the 0.8 percent delinquency rate of prime fixed-rate loans.
Foreclosures reach record high
Many of those ARMs had low introductory teaser rates that reset to payments that homeowners could no longer afford. And as teaser rates rose, the loans became less attractive to potential borrowers.
"A year ago, the initial-rate discount on the popular 3/1 and 5/1 hybrid products was about 1.8 percentage points. In our latest survey, the rate discount had virtually disappeared on these products," said Nothaft in a statement.
According to Freddie Mac (FRE, Fortune 500), hybrid ARMs that contain an initial fixed-rate period of five years remain popular with families who intend to maintain their mortgage for five years or less. Five year hybrid ARM rates run about 0.1 percent below those of a 30-year fixed-rate mortgage.
"As ARMs became more expensive relative to fixed-rate loans during the closing months of 2007, the ARM share of lending declined," he said.
Mortgage rates sink on weak economic data
Housing: no room for bulls
Find mortgage rates in your area.
Mortgage applications up 28%
Mortgage Bankers Association says the number of people filing applications rose sharply last week; seasonal volatility and falling interest rates both factors.
EMAIL | PRINT | DIGG | RSS Subscribe to Real Estate
feed://rss.cnn.com/rss/money_realestate.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) January 16 2008: 8:12 AM EST
WASHINGTON (AP) -- Mortgage application volume skyrocketed for the second consecutive week, rising 28.4 percent during the week ending Jan. 11, according to the Mortgage Bankers Association's weekly application survey.
The MBA's application index rose to 906.4 from 706 the previous week, which was shortened due to the New Year's holiday. Mortgage volume slows during the winter, which can lead to greater volatility. Application volume jumped 39 percent during the same week a year ago.
Refinance volume rose 43.4 percent, while purchase volume jumped 11.4 percent. Refinance volume accounted for 62.7 percent of total application volume, compared with 57.7 percent the previous week.
The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.
An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume. A reading of 906.4 means mortgage application activity is 9.064 times higher than it was when the MBA began tracking the data.
The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50 percent of all residential retail mortgage originations each week.
Applications rose as interest rates continued to fall. The average interest rate for traditional, 30-year fixed-rate mortgages fell to 5.62 percent from 5.73 percent. The average interest rate for 15-year fixed-rate mortgages -- which are typically used to refinance loans -- fell to 5.07 percent from 5.21 percent.
Rates for one-year adjustable-rate mortgages fell to 5.77 percent from 6.04 percent.
Washington's hard case: How to juice economy
Find mortgage rates in your area.
EMAIL | PRINT | DIGG | RSS Subscribe to Real Estate
feed://rss.cnn.com/rss/money_realestate.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) January 16 2008: 8:12 AM EST
WASHINGTON (AP) -- Mortgage application volume skyrocketed for the second consecutive week, rising 28.4 percent during the week ending Jan. 11, according to the Mortgage Bankers Association's weekly application survey.
The MBA's application index rose to 906.4 from 706 the previous week, which was shortened due to the New Year's holiday. Mortgage volume slows during the winter, which can lead to greater volatility. Application volume jumped 39 percent during the same week a year ago.
Refinance volume rose 43.4 percent, while purchase volume jumped 11.4 percent. Refinance volume accounted for 62.7 percent of total application volume, compared with 57.7 percent the previous week.
The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.
An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume. A reading of 906.4 means mortgage application activity is 9.064 times higher than it was when the MBA began tracking the data.
The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50 percent of all residential retail mortgage originations each week.
Applications rose as interest rates continued to fall. The average interest rate for traditional, 30-year fixed-rate mortgages fell to 5.62 percent from 5.73 percent. The average interest rate for 15-year fixed-rate mortgages -- which are typically used to refinance loans -- fell to 5.07 percent from 5.21 percent.
Rates for one-year adjustable-rate mortgages fell to 5.77 percent from 6.04 percent.
Washington's hard case: How to juice economy
Find mortgage rates in your area.
Mortgage meltdown: Now the rents
More fallout from the current housing slump - the cost of renting a home stagnated in 2007, according to an exclusive report for CNNMoney.
EMAIL | PRINT | DIGG | RSS Subscribe to Real Estate
feed://rss.cnn.com/rss/money_realestate.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) By Les Christie, CNNMoney.com staff writer
January 17 2008: 3:34 AM EST
Video
More video
Mortgage applications rise 28 percent to nearly 4-year high attracting refinancers.
Play video
Current Mortgage Rates
Type Overall avgs
30 yr fixed mtg 5.42%
15 yr fixed mtg 4.93%
30 yr fixed jumbo mtg 6.47%
5/1 ARM 5.14%
5/1 jumbo ARM 5.63%
Find personalized rates:
Special Reportfull coverage
Mortgage meltdown: Now the rents
Builders' confidence edges up from record low
Cleveland sues lenders over subprime
Housing: No room for bulls
NEW YORK (CNNMoney.com) -- Home prices dropped last year in most cities around the nation, and now rents are flattening out in many of the markets worst hit by the housing downturn.
According to data from Investment Instruments Corp. generated by their Rentometer.com site and supplied the data exclusively to CNNMoney, the median monthly rental bill for a sampling of 10 metro areas all around the United States rose just 0.5 percent in 2007 from $1,457 to $1,465.
Rentometer, which publishes rent-comparison statistics online, does not have historical rent data prior to 2007, but according to real estate consultant M/PF YieldStar, national rent increases had averaged between 2 and 3 percent annually the previous several years.
Home prices post record decline
"The major factors having an impact on housing prices are foreclosures, which make more rental property available," said Owen Johnson, president of Investment Instruments, "and also foreclosures that are not happening."
In the latter case, according to Johnson, many speculators bought properties to "flip," selling them quickly in a rapidly appreciating market. In some Sun-Belt areas, investors bought condos and other properties while they were still in development, to sell when a project finished.
Other investors bought existing single-family homes or other properties, intending to do cosmetic improvements and then sell them at a profit. But before they could do that, the slump hit, and home values dropped. Instead of selling at a loss, investors of all stripes are now renting them out.
Of the 10 areas sampled by Rentometer, Atlanta and Houston rents declined the most, plunging 12.8 percent for the year. Median monthly rent for all rentals in Atlanta is now $884, and in Houston it's $779.
The New York metro area had the highest median monthly rent in 2007, at $1,729, and it posted the biggest increase of 12.8 percent. San Francisco, where it grew 8.5 percent to $1,685, and Boston, where it rose 6.8 percent to $1,528, also had strong years.
San Francisco and New York are examples where Johnson said "massive demand" more than offset increased supply. These cities compete in a "global market," he said, and, by world standards, they're still relatively inexpensive for foreign currency-based consumers taking advantage of a weak dollar.
Other cities reporting big declines included Washington (11.8 percent), Miami (9.0 percent) and Phoenix (7.3 percent).
Housing: No room for bulls
There are unique dynamics to the rental market, according to Johnson. Rents rise and fall independently of home prices. And there's often a push-pull to rental amounts: They're pushed up when foreclosures put homeowners back in the rental market but pulled back because the supply of rentals increases.
And, while national figures tend not to be too volatile, local markets can record large swings, as they did in 2007, when four of the 10 markets covered recorded double digit gains or losses.
Sometimes small events can leverage large changes, according to Johnson. "If MIT opens a new dormitory, for example, it can decrease rents substantially all over the Boston area," he said.
Pulling just a few hundred students out of the rental market in Cambridge (where the Massachusetts Institute of Technology is located) cascades down across many neighborhoods. Suddenly, there are a lot of empty apartments in the area, and renters from other places move in, increasing inventory in their old neighborhoods.
Foreclosure rates are a wild card as well. If foreclosures unleash so much supply on a local market that home prices plummet, that opens up affordable purchases for many renters. Cities enduring slumping economies, job losses and high foreclosure rates can also have very low barriers to home ownership.
In some Cleveland neighborhoods hit hard by foreclosures and an economic slump, there are homes for sale with terms of a mere $500 down payment and $350 a month. These are owner-financed, so there's not even any grueling loan-approval process. Buying a modest home there can be cheaper than renting.
As for 2008, Johnson predicts more of the same; the strong rental markets will stay strong and the weak ones weak.
"Foreclosures have not worked their way through the system yet," he said. Overall, that will mean both additional supply on the market but more renters as well, leading to a flat national market.
Why the Countrywide deal will makes sense
December home prices plunge in So Cal
Mortgage applications up 28%
Find mortgage rates in your area.
EMAIL | PRINT | DIGG | RSS Subscribe to Real Estate
feed://rss.cnn.com/rss/money_realestate.rss
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close) By Les Christie, CNNMoney.com staff writer
January 17 2008: 3:34 AM EST
Video
More video
Mortgage applications rise 28 percent to nearly 4-year high attracting refinancers.
Play video
Current Mortgage Rates
Type Overall avgs
30 yr fixed mtg 5.42%
15 yr fixed mtg 4.93%
30 yr fixed jumbo mtg 6.47%
5/1 ARM 5.14%
5/1 jumbo ARM 5.63%
Find personalized rates:
Special Reportfull coverage
Mortgage meltdown: Now the rents
Builders' confidence edges up from record low
Cleveland sues lenders over subprime
Housing: No room for bulls
NEW YORK (CNNMoney.com) -- Home prices dropped last year in most cities around the nation, and now rents are flattening out in many of the markets worst hit by the housing downturn.
According to data from Investment Instruments Corp. generated by their Rentometer.com site and supplied the data exclusively to CNNMoney, the median monthly rental bill for a sampling of 10 metro areas all around the United States rose just 0.5 percent in 2007 from $1,457 to $1,465.
Rentometer, which publishes rent-comparison statistics online, does not have historical rent data prior to 2007, but according to real estate consultant M/PF YieldStar, national rent increases had averaged between 2 and 3 percent annually the previous several years.
Home prices post record decline
"The major factors having an impact on housing prices are foreclosures, which make more rental property available," said Owen Johnson, president of Investment Instruments, "and also foreclosures that are not happening."
In the latter case, according to Johnson, many speculators bought properties to "flip," selling them quickly in a rapidly appreciating market. In some Sun-Belt areas, investors bought condos and other properties while they were still in development, to sell when a project finished.
Other investors bought existing single-family homes or other properties, intending to do cosmetic improvements and then sell them at a profit. But before they could do that, the slump hit, and home values dropped. Instead of selling at a loss, investors of all stripes are now renting them out.
Of the 10 areas sampled by Rentometer, Atlanta and Houston rents declined the most, plunging 12.8 percent for the year. Median monthly rent for all rentals in Atlanta is now $884, and in Houston it's $779.
The New York metro area had the highest median monthly rent in 2007, at $1,729, and it posted the biggest increase of 12.8 percent. San Francisco, where it grew 8.5 percent to $1,685, and Boston, where it rose 6.8 percent to $1,528, also had strong years.
San Francisco and New York are examples where Johnson said "massive demand" more than offset increased supply. These cities compete in a "global market," he said, and, by world standards, they're still relatively inexpensive for foreign currency-based consumers taking advantage of a weak dollar.
Other cities reporting big declines included Washington (11.8 percent), Miami (9.0 percent) and Phoenix (7.3 percent).
Housing: No room for bulls
There are unique dynamics to the rental market, according to Johnson. Rents rise and fall independently of home prices. And there's often a push-pull to rental amounts: They're pushed up when foreclosures put homeowners back in the rental market but pulled back because the supply of rentals increases.
And, while national figures tend not to be too volatile, local markets can record large swings, as they did in 2007, when four of the 10 markets covered recorded double digit gains or losses.
Sometimes small events can leverage large changes, according to Johnson. "If MIT opens a new dormitory, for example, it can decrease rents substantially all over the Boston area," he said.
Pulling just a few hundred students out of the rental market in Cambridge (where the Massachusetts Institute of Technology is located) cascades down across many neighborhoods. Suddenly, there are a lot of empty apartments in the area, and renters from other places move in, increasing inventory in their old neighborhoods.
Foreclosure rates are a wild card as well. If foreclosures unleash so much supply on a local market that home prices plummet, that opens up affordable purchases for many renters. Cities enduring slumping economies, job losses and high foreclosure rates can also have very low barriers to home ownership.
In some Cleveland neighborhoods hit hard by foreclosures and an economic slump, there are homes for sale with terms of a mere $500 down payment and $350 a month. These are owner-financed, so there's not even any grueling loan-approval process. Buying a modest home there can be cheaper than renting.
As for 2008, Johnson predicts more of the same; the strong rental markets will stay strong and the weak ones weak.
"Foreclosures have not worked their way through the system yet," he said. Overall, that will mean both additional supply on the market but more renters as well, leading to a flat national market.
Why the Countrywide deal will makes sense
December home prices plunge in So Cal
Mortgage applications up 28%
Find mortgage rates in your area.
Index of homebuilder sentiment stuck at record low for third-straight month
Associated Press - December 17, 2007 2:03 PM ET
WASHINGTON (AP) - Still a lot of doom and gloom among the nation's homebuilders.
The National Association of Home Builders says its housing market index was at a record low for the third straight month. The index gauges builders' perceptions of conditions and expectations for home sales over the next six months. The December reading of 19 was the lowest since the index began in January 1985.
Index readings higher than 50 indicate positive sentiment. The index has been below 50 since May of last year, has declined for eight straight months this year and has been unchanged since October.
WASHINGTON (AP) - Still a lot of doom and gloom among the nation's homebuilders.
The National Association of Home Builders says its housing market index was at a record low for the third straight month. The index gauges builders' perceptions of conditions and expectations for home sales over the next six months. The December reading of 19 was the lowest since the index began in January 1985.
Index readings higher than 50 indicate positive sentiment. The index has been below 50 since May of last year, has declined for eight straight months this year and has been unchanged since October.
Construction of new homes falls 24.8% in 2007, the largest amount in 27 years
Associated Press - January 17, 2008 9:13 AM ET
WASHINGTON (AP) - Construction of new homes fell in 2007 by the largest amount in 27 years.
The Commerce Department says construction began on 1.353 million new homes and apartments last year, down 24.8% from 2006.
It was the second-biggest annual decline on record. The biggest was a 26% plunge in 1980, when the Federal Reserve was pushing interest rates to post-World War II records in an effort to combat inflation.
Many economists believe that the current slump in housing will rival the dive in the late 1970s and early 1980s when housing construction fell for four straight years. It finally began to recover after the severe 1981-82 recession.
For December, construction fell by a bigger-than-expected 14.2%.
WASHINGTON (AP) - Construction of new homes fell in 2007 by the largest amount in 27 years.
The Commerce Department says construction began on 1.353 million new homes and apartments last year, down 24.8% from 2006.
It was the second-biggest annual decline on record. The biggest was a 26% plunge in 1980, when the Federal Reserve was pushing interest rates to post-World War II records in an effort to combat inflation.
Many economists believe that the current slump in housing will rival the dive in the late 1970s and early 1980s when housing construction fell for four straight years. It finally began to recover after the severe 1981-82 recession.
For December, construction fell by a bigger-than-expected 14.2%.
Mortgage Rates - Metrocities Mortgage January 11, 2008
Rates have fallen and are looking very good today.
--------------------------------------------------------------------------------
Loan Program
Loan Amount
Interest Rate
30 Year Fixed
$417,000
5.750%
15 Year Fixed
$417,000
5.250%
7/1 ARM
$417,000
5.750%
5/1 ARM
$417,000
5.750%
3/1 ARM
$417,000
5.750%
6-Month Interest-Only ARM
$417,000
5.875%
1-Month Interest-Only ARM
$650,000
7.125%
30 Year Fixed
$650,000
6.875%
--------------------------------------------------------------------------------
FOR MORE INFORMATION, CONTACT:
Ronald Tennant
Senior Mortgage Consultant
Direct Phone: 302.644.7964
Mobile Phone: 302.858.2289
Fax: 610.290.1937
Email: rtennant@metrocitiesmtg.com
Web: www.ronaldtennant.com
17316 Costal Highway
Lewes, DE 19958
Click here if you wish to be removed from this mailing list.
Metrocities Mortgage, LLC is a Delaware limited liability company. Information is subject to change without notice. This is not an offer for extension of credit or a commitment to lend.
--------------------------------------------------------------------------------
Loan Program
Loan Amount
Interest Rate
30 Year Fixed
$417,000
5.750%
15 Year Fixed
$417,000
5.250%
7/1 ARM
$417,000
5.750%
5/1 ARM
$417,000
5.750%
3/1 ARM
$417,000
5.750%
6-Month Interest-Only ARM
$417,000
5.875%
1-Month Interest-Only ARM
$650,000
7.125%
30 Year Fixed
$650,000
6.875%
--------------------------------------------------------------------------------
FOR MORE INFORMATION, CONTACT:
Ronald Tennant
Senior Mortgage Consultant
Direct Phone: 302.644.7964
Mobile Phone: 302.858.2289
Fax: 610.290.1937
Email: rtennant@metrocitiesmtg.com
Web: www.ronaldtennant.com
17316 Costal Highway
Lewes, DE 19958
Click here if you wish to be removed from this mailing list.
Metrocities Mortgage, LLC is a Delaware limited liability company. Information is subject to change without notice. This is not an offer for extension of credit or a commitment to lend.
35621 Wolf Neck Road, Rehoboth Beach, DE 19971
Address:
REHOBOTH BEACH, DE 19971
MLS ID# 555871
$179,000
3 Bed, 2 Bath
980 Sq. Ft.
Single Family Property, County: SUSSEX, Year Built: 1989, Waterfront property, Central air conditioning, Laundry room
To access this page directly, use http://www.realtor.com/realestate/rehoboth+beach-de-19971-1093978308/
Property Features
Single Family Property
Status: Active
County: SUSSEX
Year Built: 1989
3 total bedroom(s)
2 total bath(s)
2 total full bath(s)
Approximately 980 sq. ft.
Style: Ranch
Laundry room
Central air conditioning
Interior features: Carpet, Clothes dryer, Clothes washer, Dishwasher, Disposal, Laundry rm/area, Microwave, Range and oven, Tile flrs, Vinyl flrs
Exterior features: Clear lot, Deck, Partially fenced, Porch, Public sewer srvc, Storage/out-building(s), Waterfront property
Waterfront property
Approximate lot is 50X150
School District: Cape Henlopen
Up LeftRightDown RecenterStreetCityStateCountryZoomInZoomOut1RoadAerial
Bird's eye
--------------------------------------------------------------------------------
NESW
Show labels
See this location in bird's eye view.
--------------------------------------------------------------------------------
600 yds600 yds© 2006 Microsoft Corporation © 2006 NAVTEQ
© AND© 2006 Microsoft Corporation © 2006 NAVTEQ
© AND
Formatted for easy printing so you can take this with you. Remember to say you found it on REALTOR.com®.
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. You must verify the information and bear all risk for inaccuracies.
Presented By
! Atsidis Donna
I Sell Rehoboth Beach
Home Office: (302) 644-0117
Mobile: (302) 542-1787
Office: (302) 644-7965
Brokered By
BEACH TO BAY REAL ESTATE CENTER
Visit Our New Homes Showroom Covering All of Sussex County
broker: (302) 644-6880
Fax: (302) 644-6881
Toll Free: (866) 639-4287
Help
REHOBOTH BEACH, DE 19971
MLS ID# 555871
$179,000
3 Bed, 2 Bath
980 Sq. Ft.
Single Family Property, County: SUSSEX, Year Built: 1989, Waterfront property, Central air conditioning, Laundry room
To access this page directly, use http://www.realtor.com/realestate/rehoboth+beach-de-19971-1093978308/
Property Features
Single Family Property
Status: Active
County: SUSSEX
Year Built: 1989
3 total bedroom(s)
2 total bath(s)
2 total full bath(s)
Approximately 980 sq. ft.
Style: Ranch
Laundry room
Central air conditioning
Interior features: Carpet, Clothes dryer, Clothes washer, Dishwasher, Disposal, Laundry rm/area, Microwave, Range and oven, Tile flrs, Vinyl flrs
Exterior features: Clear lot, Deck, Partially fenced, Porch, Public sewer srvc, Storage/out-building(s), Waterfront property
Waterfront property
Approximate lot is 50X150
School District: Cape Henlopen
Up LeftRightDown RecenterStreetCityStateCountryZoomInZoomOut1RoadAerial
Bird's eye
--------------------------------------------------------------------------------
NESW
Show labels
See this location in bird's eye view.
--------------------------------------------------------------------------------
600 yds600 yds© 2006 Microsoft Corporation © 2006 NAVTEQ
© AND© 2006 Microsoft Corporation © 2006 NAVTEQ
© AND
Formatted for easy printing so you can take this with you. Remember to say you found it on REALTOR.com®.
This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. You must verify the information and bear all risk for inaccuracies.
Presented By
! Atsidis Donna
I Sell Rehoboth Beach
Home Office: (302) 644-0117
Mobile: (302) 542-1787
Office: (302) 644-7965
Brokered By
BEACH TO BAY REAL ESTATE CENTER
Visit Our New Homes Showroom Covering All of Sussex County
broker: (302) 644-6880
Fax: (302) 644-6881
Toll Free: (866) 639-4287
Help
Subscribe to:
Posts (Atom)