Markets:
DJIA --448.61-1.51%
NASDAQ --323.58-2.93%
S&P --76.42-2.05%
Featured Stocks:
LIT -2.66% 67.41
DOUG -4.00% 4.08
RIG -7.69% 2.52

housing market recovery

Article Index

Why the Housing Market Recovery is Bypassing Young Buyers – and What that Means to the Market

By , Associate Editor, Money Morning -

Think of the housing market as a ladder with first-time homebuyers at the bottom and homeowners on the upper rungs, with homes priced higher as you proceed upward.

The first-time homebuyers make it possible for those in the lower-priced homes to sell and move up to costlier homes, which in turn enables the sellers of those homes to move up to costlier homes - and so on.

But amid the housing market recovery - sales of new and existing homes are up and prices have been rising - many first-time buyers are being shut out of the market.

And that has far-reaching implications for the market as a whole, given the role those first-timers play in creating demand from the bottom of the ladder.

"They're the first rung of the ladder," Douglas Duncan, senior vice president and chief economist at Fannie Mae, told Money Morning.

To continue reading, please click here...

How Higher Mortgage Rates Will Dent Housing's Recovery

By , Associate Editor, Money Morning -

How much do higher mortgage rates reduce home sales?

That, of course, depends on how much rates rise and whom you ask. But there's no doubt higher mortgage rates hurt sales, experts say.

Interest rates have been climbing since May. Rates on 30-year, fixed-rate mortgages averaged 4.37% for the week ending July 18, Freddie Mac's weekly survey of conforming mortgage rates said. That's up more than a percentage point from early May.

And existing home sales fell 1.2% in June, to a seasonally adjusted annual rate of 5.08 million, from 5.14 million in May (but still 15.2% higher than in June 2012), the National Association of Realtors said Monday.

Lawrence Yun, the NAR's chief economist, told Money Morning he expects interest rates to hit 5% to 5.5% within a year. And while he foresees existing home sales rising as much as 10% for 2013, he predicts only a single-digit percentage increase next year primarily because of higher mortgage rates.

"There's no risk of any reversal of this housing recovery; it's just slowing the pace of this housing recovery," Yun said.

He said robust demand and affordable prices would lessen the impact of the higher mortgage rates in much of the country, but pricier markets in New York, parts of California and Hawaii would be hit harder by the higher mortgage rates.

Read More…

Big REIT Opportunities in the Housing Market Recovery

By , Global Investing Specialist, Money Morning -

Ultra-low interest rates have given an artificial advantage to regions with very high real estate prices, while artificially depressing rents. But that trend is shifting.
And that means that a new opportunity in the real estate market is appearing.
While the herd investors are chasing the real estate rally in all the wrong places, there's a handful of real estate investment trusts (REITs) that are well positioned to profit on this first wave of recovery -- and the second.
Don't get stuck with REITs that will wash out…

Will the Home Mortgage Interest Deduction Vanish in 2013?

By , Executive Producer, Money Morning -

In 2013, Congress is expected to explore a number of tax reforms in order to address staggering deficits and a crippling $17 trillion in debt owed by the Federal government.

No proposed tax reform will be more controversial this year than attempts to alter the Home Mortgage Interest Deduction (HMID).

Considered the holy grail of tax deductions, the annual tax break to homeowners, which provides more than $100 billion a year in tax relief, could see significant changes, thus affecting the finances of millions of Americans.

But in order to understand how these changes could affect you, one needs to understand how this tax break became so monstrous in the first place, and what the impact of such proposals could have on the housing markets.

In fact, this very issue proves why even grander tax reform is necessary right now in the United States.

To continue reading, please click here...

Hedge Fund Sues Government Over Seizing Fannie Mae, Freddie Mac Profits

By , Associate Editor, Money Morning -

A hedge fund hoping to capitalize on the comeback of Fannie Mae and Freddie Mac claims in a lawsuit the government illegally seized the profits of the two mortgage finance giants.

The suit, filed Sunday by Perry Capital LLC, says the government violated a 2008 law that put Fannie and Freddie into conservatorship, through an amendment changing the terms of the government's bailout.

Under original terms, Fannie and Freddie paid fixed quarterly dividends equal to 10% of the government's stake.

But in 2012, the U.S. Treasury Department amended the terms of the bailout and began taking all Fannie and Freddie's quarterly profits.

Theodore Olson, an attorney representing Perry Capital, said in a news release the 2008 law "established very specific rules about the government's limits and obligations under conservatorship. Investors had every right to expect these rules to be followed.

"If the government wanted to assume the powers of receivership, it could have chosen that course," Olson said. "Instead, it chose conservatorship, and with the [amendment] it overreached, exceeding the legal boundaries of the statute and failing to meet obligations of conservatorship mandated by Congress" under the 2008 law.

To continue reading, please click here...

How to Profit from the Housing Market Recovery

By , Associate Editor, Money Morning -

Housing has rebounded in a big way.

Sales of new, single-family homes surged from April to May at the highest rate since July 2008 and by 29% over the previous year, while existing home sales reached the highest level since November 2009.

And home prices posted their biggest annual increase in more than seven years in May and are expected to continue rising, CoreLogic said Tuesday.

How can you profit from the housing market recovery?

Buying the homebuilders' stocks? Sure, but that's almost too easy, and after impressive gains, homebuilder stocks may have peaked for the short term.

But savvy investors trying to figure out how to profit from the housing market recovery can look beyond the homebuilders to other companies benefiting from the recovery.

Among them: construction materials suppliers, home improvement retailers, paint companies and those manufacturing and selling furniture and appliances.

In fact, furniture and related products led all other manufacturing sectors in the latest Institute for Supply Management report for June.

Here are five companies worth a look if you're seeking to profit from the housing market recovery.

Playing the Housing Market Recovery

To continue reading, please click here...

Read More…

7 Reasons This Housing Market Recovery is Genuine

By , Associate Editor, Money Morning -

The housing market recovery is for real this time. Coming after the housing market crash, the recovery is welcome news to those in the industry - and bodes well for the economy as a whole.

"It almost seems too good to be true," Lawrence Yun, the chief economist at the National Association of Realtors, told Money Morning.

The latest confirmation of the market's rebound is the new survey of home builder confidence from Wells Fargo Bank and the National Association of Home Builders, which climbed to its highest level since 2006.

And housing starts were up 6.8% in May and 28.1% year to date, the U.S. Census Bureau said.

To continue reading, please click here...

The 10 Best U.S. Housing Markets 2013

By , Money Morning -

The percentage of Americans optimistic about the U.S. housing market has reached levels not seen since rumblings of the financial crisis began.

A new Rasmussen Reports national survey found 37% of homeowners believe the value of their home will increase in the next year - thehighest since September 2008.

And 58% of Americans believe their homes are worth more now than when they bought them. That's the highest percentage believing this since fall 2011.

To continue reading, click here...

Here's Another Troubling Sign America is Circling the Drain

By , Chief Investment Strategist, Money Morning • @ShahGilani_TW -

Don't blame yourself if you missed this tidbit last week...

On Thursday, the Consumer Financial Protection Bureau hit the nation's four largest mortgage insurers with a total of $15.4 million in fines for "allegedly" paying kickbacks to lenders to steer business their way.

Of course, they didn't have to admit they did it, and therefore, they didn't do what they were fined for.

Back in the summer of 2009, the Inspector General of the Department of Housing and Urban Development handed the Justice Department evidence that laid bare a scheme by lenders (the usual suspects: Citigroup, Wells Fargo, Countrywide, and so on) to get kickbacks from mortgage insurers for making borrowers - who had to buy mortgage insurance - purchase coverage from those companies kicking back profits to lenders. In the industry, it's called "forced placement"

Who did what here?

To continue reading, please click here...

The Secret Behind the Housing Market "Recovery"

By , Money Morning -

U.S. home prices climbed 10.2% in February, the biggest year-over-year gain since March 2006.



The data seemed to support that a housing market recovery is alive and well - or, is it?

Even though buying is up, banks aren't handing out mortgages at a high enough rate to support this climb.

We asked Money Morning Capital Wave Strategist Shah Gilani to explain what was behind this major housing market change. You might be surprised to learn who's driving the home buying - and what it means for the housing market recovery.

Watch his interview below for the answer.

To continue reading, please click here...

Can the U.S. Housing Market Continue this Recovery?

By , Contributing Writer, Money Morning -

The ailing U.S. housing market, the trigger of the Great Recession, is indeed starting to recover - but it'll take years before it's healed.

The Standard & Poor's/Case Shiller Home Price Index released today (Tuesday) revealed that home prices in 20 U.S. cities rose in June from the same period a year ago. It also marked the first such gain since September 2010.

All 20 cities tracked by the index also rose in June from May, the second month in a row in which every city posted month-over-month gains. The most robust one-month gains came from Detroit, Minneapolis, Chicago and Atlanta.

"The combined positive news coming from both monthly and annual rates of change in home prices bode well for the housing market," David Blitzer, chairman of the S&P's index committee said in a statement. "We seem to be witnessing exactly what we need for a sustained recovery: monthly increases coupled with improving annual rates of change."

Helping the housing market rebound are record-low interest rates. Mortgage rates hit historic lows this year, and while they have inched up a tad, they are still at record low levels.

The National Association of Realtors last week reported sales of previously occupied homes climbed 10% in the past year. Builders, seeing an uptick in interest from potential buyers, are growing more confident. The group in June applied for the largest number of building permits in roughly four years.

The news is encouraging, but don't be mistaken: The U.S. housing market is still a far cry from healed or even healthy.

"We seem to have upward momentum and we have confirmatory evidence and like NAHB housing confidence index," said economist and index founder Robert Shiller. "But you know we have lots of clouds on the horizon too."

To continue reading, please click here...

Read More…