Oct
24
Home Sales Plunge by 8 Percent
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Sales of Existing Homes Fall by Largest Amount on Record in September
WASHINGTON (AP) � Sales of existing homes had a record decline in September while median home prices fell by the largest amount in nearly a year, reflecting deepening problems in the troubled housing market.
Analysts said the current downturn is already more severe than the housing slump of the 1990s. They predicted that before it is resolved, it will rival the 1980-82 housing slump. Back then, the industry was battered by double-digit mortgage rates and the economy was in a steep recession.
The National Association of Realtors reported Wednesday that sales of existing homes fell 8 percent in September. It was the largest decline to show up in records dating to 1999. The seasonally adjusted annual sales rate of 5.04 million existing homes was the slowest pace on record.
The median price � the point at which half the homes sold for more and half for less � fell to $211,700 in September, 4.2 percent lower than the sales price a year ago. It was the biggest price drop since last October and marked the 13th time out of the past 14 months that the year-over-year sales price has decreased.
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Oct
24
Home Builders: Worst Is Yet To Come
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Economists offer dour outlook for housing prices and construction, citing continuing credit crisis – weakness is likely to persist into 2009.
NEW YORK (CNNMoney.com) — The battered markets for real estate and home building still have farther to fall, according to a range of economists who spoke Wednesday at a forecast conference sponsored by the National Association of Home Builders.
The economists agreed that the problems with home finance markets will continue to hit housing into next year, and that even when there is a recovery, it will be a slow process that will see weakness continue into 2009.
While most said they believed the overall U.S. economy can weather the housing downturn, several saw significant risk of a recession. Mark Zandi, chief economist of Moody’s Economy.com, said that large areas of the country will fall into recession, if they haven’t done so already.
The economists also admitted to being surprised by how bad the housing downturn has become, and all said that making forecasts of a recovery is difficult due to the problems in the credit markets.
“This time, we just don’t know how it’s going to pan out because the securities markets have become so much more important,” said David Seiders, chief economist with the builder’s trade group.
Oct
19
Outlook for surging mortgage delinquencies worsens.
NEW YORK (CNNMoney.com) — As housing markets deteriorated over the summer, and a liquidity squeeze buffeted credit markets, delinquencies and defaults jumped. And now one forecast predicts that these numbers will climb even higher over the next six months.
The Core Mortgage Risk Monitor (CMRM), an index of foreclosure risk compiled by First American CoreLogic, increased by 1.6 percent compared with the three months ended June 30.
The index predicts the chances that future mortgage loan delinquencies will occur and is based on such factors as fraud propensity and collateral risk (the accuracy and sustainability of home prices paid), house price dynamics and the health of local market economies.
Nationally, the index has settled into a level similar to what existed at the end of the last recession in 2001. And because the risk of default continued to rise for two years after that event, CoreLogic predicts the current risk index will keep going up for another 18 months or more.
Oct
17
No light at the end of the tunnel in latest forecast from the Mortgage Bankers Association.
BOSTON (CNNMoney.com) — For those in the real estate industry and for those looking to buy or sell a home, it could take until 2009 to catch a break.
That’s the forecast from Doug Duncan, chief economist for the Mortgage Bankers Association (MBA), who will present his outlook to an auditorium full of real estate professionals on Wednesday morning.
Duncan expects national median home prices to fall between 2 percent and 4 percent both this year and next. Prices will be held back by an oversupply of homes for sale, an increase in foreclosures and continued uncertainty among mortgage investors,
Oct
2
WASHINGTON (AP) By Alan Zibel � An index that forecasts near-term home sales fell in August to a record low as would-be homebuyers had difficulty getting mortgages.
The National Association of Realtors said Tuesday its seasonally adjusted index of pending sales for existing homes fell 6.5 percent from July and 21.5 percent from a year ago.
August’s reading of 85.5 was below analysts’ expectations and the lowest ever for the index, which started in January 2001. Analysts surveyed by Briefing.com had predicted the index would fall by 2 percent from July.
The pending home sales index is designed to predict sales levels over the following two months. An index reading of 100 is equal to the average level of sales activity in 2001.
With defaults rising among borrowers with weak credit, lenders in August backed off from all but the safest mortgages.
The problems, experts say, were seen especially in expensive areas where borrowers need to take out “jumbo” home loans above $417,000 that can’t be sold to government-sponsored mortgage companies Fannie Mae and Freddie Mac
In late August, the gap in mortgage rates between jumbo loans and “conforming” loans below the $417,000 limit widened to 0.93 percentage points, up from a typical level of 0.2 percentage points, according to financial publisher HSH Associates.
That difference makes it harder for prospective buyers � particularly in the pricey Northeast and West Coast markets � to afford more expensive homes.
“This is probably the most challenging credit market environment that’s faced the housing market in 10 years,” said Keith Gumbinger, vice president of HSH.
As of last week, the gap had narrowed to a difference of 0.76 percentage points, with 30-year fixed rate jumbo home loans nationwide averaging 7.22 percent and conforming loans averaging 6.46 percent, according to HSH’s weekly survey.
While that’s an improvement, Gumbinger said, it could take months for the situation to improve.
In some areas, up to 30 percent of signed contracts fell through in August, said Lawrence Yun, senior economist at the real estate trade group.
“Some creditworthy people are trying to buy homes but can’t,” Yun said in a prepared statement.
The realtors’ index is based on a sample representing about 20 percent of existing home sales nationwide.
Last week the group said that sales of existing single-family homes dropped by 4.3 percent in August to the lowest point in five years. Sales dropped to 5.5 million units that month, the slowest pace since August 2002.