housing recovery

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    The Home Sales Market Is Dead - This Chart Proves It

    housing recovery

    By , Liquidity Specialist, Money Morning -

    The seasonally adjusted headline number for the monthly-error-times-12-annualized version of new home sales in June was 482,000.

    Wall Street analysts had guessed that the number would be 550,000. The Wall Street Journal went into apoplectic excuse-making mode, almost foaming at the mouth to try to find pundits to explain away the bad number.

    The whole spectacle was silly and pointless since we have actual data and can readily see whether sales remain on trend or not. We don't need Wall Street pundits to tell us what to think.

    We can see for ourselves...

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The Home Sales Market Is Dead - This Chart Proves It

By , Liquidity Specialist, Money Morning -

housing recovery

The seasonally adjusted headline number for the monthly-error-times-12-annualized version of new home sales in June was 482,000.

Wall Street analysts had guessed that the number would be 550,000. The Wall Street Journal went into apoplectic excuse-making mode, almost foaming at the mouth to try to find pundits to explain away the bad number.

The whole spectacle was silly and pointless since we have actual data and can readily see whether sales remain on trend or not. We don't need Wall Street pundits to tell us what to think.

We can see for ourselves...

The Housing "Recovery" Is Fabricated Optimism

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

DJIA futures

When I moved to Sarasota in 1999 I was invited by a prominent local to an "un-wedding wedding" to make new friends in town. I accepted the invitation and, not wanting to display my ignorance, avoided asking the burning question, "What's an un-wedding wedding?"

Inevitably I found out what an un-wedding wedding is. It's a full-blown wedding, only the host isn't actually getting married. They want to get married but aren't, and go through the motions anyway.

The truth about the manipulation of celebratory events to fabricate optimism about a desired future reminds me of the state of housing in America today. Here's why...

How "The Most Powerful Man in the World" Got His Mortgage Denied...

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

U.S. housing market

Ben Bernanke began his tenure as Chairman of the Federal Reserve Board just as the housing bubble was peaking in February 2006.

He exited the post in February of this year after supposedly shepherding the country out of the Great Recession the mortgage crisis spawned.

He recently admitted the housing recovery is hitting a wall.

But this time, it's personal... Full Story

What Today's Case-Shiller Home Price Index Doesn't Show You About the Housing Market

By , Associate Editor, Money Morning • @JimBach22 -

Case Shiller

The S&P/Case-Shiller Home Price Index, a widely followed benchmark for home prices, showed a slow growth in home prices amid an unimpressive housing recovery.

But given the factors underlying this recovery, and the activity in the housing market, this should come as no surprise.

Here's why this housing recovery just can’t seem to take off…

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…

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.

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The Fight Club: Are "Dignity Mortgages" Essential or Insane?

By , Money Morning -

There's a new idea sweeping through the country. It's called dignity mortgages.
Backers say this new financing idea will help millions of homeowners and get the middle class back to the heart of the American recovery.
Opponents thinks it's a recipe for disaster that will make the first financial crisis look like a cakewalk.
Today the Fight Club is taking on this growing issue, let's get ready to rumble...

These 5 Charts Prove the Housing Recovery is for Real - and Just Beginning

By , Money Morning -

The housing market has rebounded in a big way, with home prices increasing the most since the housing bubble burst in 2006.

Prices aren't the only indicator pointed toward recovery.

Housing barometers including sales, permits and housing starts have surged well beyond their recession troughs and back into healthy territory - and bullish analysts say there's plenty more room for growth after years of decreased activity.

The housing market activity has been driven by pent-up demand, improved consumer confidence, low interest rates and still affordable prices. And the industry's comeback comes at a time when supply is tight. The inventory of homes available is at near-historic lows, and foreclosures have declined.

To continue reading, please click here...

Is This a Recovery or a New Housing Bubble?

By , Money Morning -

Investors have taken comfort from the recent improvement in housing prices seen across the country.

Shares of homebuilders, including Toll Brothers (NYSE: TOL), Lennar Corporation (NYSE: LEN) and the SPDR S&P Homebuilders ETF (NYSE: XBH), had been bid up late in 2012 and into January.

But now the shares are rolling over. Could the relative underperformance of the homebuilders be telling us something?

David Stockman, former director of the Office of Management and Budget under President Ronald Reagan, thinks so.

In an interview with The Daily Ticker, Stockman said, "I would say we have a housing bubble again. I don't think we have a real, organic, sustainable recovery."

Stockman argues that "fast money" is moving into the local real estate markets that suffered the biggest declines in order to "speculate in buy-to-rent for a quick trade."

Stockman thinks that these speculators will be looking to sell out as soon as prices rise sufficiently to give them a specific rate of return and that "they will be gone as quickly as they came."

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