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Housing Bubble Bursting?

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The famous ocean liner could not maneuver around the massive iceberg quickly enough to avoid hitting it.
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This is not entirely accurate. The ocean liner actually did very little to try to avoid hitting it. Perhaps the same could be said of the Fed... we'll just have to see what the outcome is.
 
Guys,

You are falling down on the job. Usually I see the link to articles posted right here first- but alas, no one must have read the most recent NAR predictions of mdeain prices increasing in 2007 by 1.9% with more increase forecast for 2008 and that new home sales should increase in the 3rd or 4th quarter both in volume and price.

Now I am not saying what I believe or do not- already said that many time over, but...

Tsk, tsk.

Brad
 
So now one of the biggest builders plays the forclosure game , who will pay.

As a Fortune 150 company with over $14 billion in revenue, Pulte Homes Inc. isn't the type of developer that should have to default on a $7.3 million loan, even in a souring housing market.

Still, Pulte did just that on Stonebridge Commons, an active adult community it's building in Hanson -- not for lack of funds, but simply because the company decided the 58 acres it bought in 2004 was no longer worth what it had paid.
 
NAR needs a bigger pot to keep cooking the books.Do you believe sales were up in January??was everyone out buying homes in Denver between the snowstorms???Durable goods down 7%.Where did all these homedebters get their furniture? anyway , here is the good news so get ready for big comeback
according to the Realtor goofballs...

WASHINGTON (AP) -- Sales of existing homes rose in January by the largest amount in two years, raising hopes that the worst of the severe slump in housing may be coming to an end. Median home prices, however, fell for a sixth straight month.
The National Association of Realtors reported Tuesday that sales of previously owned homes rose by 3 percent last month, the biggest one- month increase since a 3.3 percent increase in January 2005, a time when housing was roaring toward the peak of its five-year boom.

The median price of an existing home sold in January dropped to $210,600, a decline of 3.1 percent from a year ago. It marked the sixth straight month that the median price has been down compared with a year ago. The January decline was the third-biggest drop in history.

Analysts said that the decline in prices was actually an encouraging sign that home sellers are starting to adjust their asking-price down and this should help speed the correction in housing.

"For the last several months I have been hemming and hawing on whether we have reached bottom," said David Lereah, chief economist for the Realtors. He said that the January report was an encouraging sign that the bottom for sales activity was reached last September with sales expected to stabilize this year.

But he cautioned that the warm weather in December boosted home closing in January, the activity that is tracked in the Realtors report. He said there could be a bit of a payback in coming months.

By region of the country, sales rose the most in the West, up 5.6 percent, followed by gains of 4.8 percent in the Midwest and 2 percent in the South. Sales in the Northeast were unchanged in January compared to December.

In other economic news, the Commerce Department reported that orders to factories for big-ticket manufactured goods plunged 7.8 percent in January, the largest decline since October and more than double what analysts had been expecting.

The decline in durable goods was led by an 18 percent plunge in transportation orders, reflecting a big decline in orders for commercial jetliners and continued weakness in auto manufacturing.

Demand for commercial aircraft fell by 60.3 percent after having soared by 31.3 percent the previous month. Boeing Co. took orders for just 13 planes in January after having seen orders soar to 212 in December. Aircraft orders are extremely volatile from month to month.

But there also was weakness in a number of other areas from heavy machinery to computers. Demand for motor vehicles and parts falling by 5.1 percent. The auto sector has been particularly hard hit as American car manufacturers are struggling to compete with foreign rivals.

Demand for non-defense capital goods orders fell by a record 19.9 percent in January. This category is closely watched for signals it can send about the plans businesses have to expand and modernize their operations. Business investment has been slowing in recent months.

The 7.8 percent January overall decline left orders at $203.9 billion on a seasonally adjusted basis. Analysts had been expecting a much smaller drop of around 3 percent.
 
Existing-home sales rise 3%, median sales price fell 3.1% in January

http://www.marketwatch.com/news/story/us-existing-home-sales-rise-3/story.aspx?guid=%7B04AB71A5%2DB6D9%2D443A%2DA191%2D044DE6F32A30%7D

Only NAR can spin the data to be good news Brad.

WASHINGTON (MarketWatch) -- Sales of existing U.S. homes rose 3% to a seasonally adjusted annual rate of 6.46 million in January, the highest in seven months, the National Association of Realtors reported Tuesday.
Sales were down 4.3% year-on-year.

Inventories of unsold homes on the market rose 2.9% to 3.55 million, a 6.6-month supply.

The median sales price fell 3.1% year-over-year to $210,600.
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An inconvenient truth - for housing

http://www.marketwatch.com/news/story/fed-facing-inconvenient-truth/story.aspx?guid=%7BC1BCBD83%2D698A%2D4476%2D8D46%2D39F66D9002F1%7D

HEMPSTEAD, N.Y. (MarketWatch) -- Like it or not, the Federal Reserve is going to have to choose between growth and inflation -- a tough call in anyone's book.
For example, both delinquencies and foreclosures are rising sharply. This increases the supply of homes on the market, further depressing their prices.

At the same time, the demand for homes is shrinking because many prospective homebuyers are finding it tougher to get a mortgage. According to the latest Fed survey, more banks tightened their lending standards for home loans in last year's fourth quarter than in any other quarter since the early 1990s.

If the drop in the housing market spreads to other sectors -- as it appears to be doing, witness the widespread plunge in new orders for durable goods in January -- it will be even more difficult for people to hold onto their homes.

Meanwhile, inflation appears to be impervious to economic drag. The rise in the consumer price index in January was widespread -- especially after removing food and energy prices.
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Greenspan is talking recession in late 2007. Now that he it out of office he can tell the truff.
 
Freddie Mac tightens standards amid subprime-loan crisis

http://www.marketwatch.com/news/story/freddie-mac-toughens-subprime-standards/story.aspx?guid=%7B3F839423%2D9407%2D4ED0%2D9351%2D4999979A647C%7D

NEW YORK (MarketWatch) -- Government-sponsored mortgage marketer Freddie Mac is the latest company to weigh in on the growing concern over lending to unqualified homebuyers, saying Tuesday it's tightening its standards for buying mortgages held by such borrowers.
The McLean, VA.-based company said it would start enforcing the new standards after Sept. 1, 2007.

Shockwaves have been rippling through financial markets as more signs emerge that relaxed lending standards during the housing boom of recent years are leading to escalating defaults and rising losses for lenders and owners of securities backed by such loans.

For its part, Freddie Mac said Tuesday that it would stop buying those mortgages that have "a high likelihood of excessive payment shock and possible foreclosure." Instead, the company plans to buy only subprime adjustable-rate mortgages, and securities backed by such loans, that have been qualified at the fully indexed and fully amortizing rate.

The firm said its new requirements cover mortgages known as 2/28 and 3/27 hybrid ARMs, which currently make up about three-quarters of the subprime market.
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