The Home Front
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New Home Sales: Lowest Since 1991
Continue reading… 2 CommentsThe government on Wednesday released its new home sales report for October. Here are the key stats:
New home sales fell 5 percent from September and 40 percent from October 2007.
The median price of new homes fell 7 percent, to $218,000, from a year earlier.
Here’s what Mike Larson, a real estate analyst at Weiss Research, had to say about the numbers in a report of his own:
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Jamestown Vs. Plymouth: First Thanksgiving Housing Showdown
Continue reading… 3 CommentsAlthough Plymouth Colony in Massachusetts is traditionally considered the site of the first Thanksgiving, some argue that the celebration actually took place earlier on a plantation near Jamestown, Va.
While historians may continue to grapple over that, Cyberhomes has released the following snapshot of Plymouth and Jamestown in an effort to determine which location would make a better destination for settlers today.
Here's what it found:
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Home Price Declines Accelerate, More Pain Ahead
Continue reading… 1 CommentThe S&P/Case-Shiller Home Price Indices for the third quarter--released Tuesday--showed record declines in home prices.
Here are the details:
The decline in the S&P/Case-Shiller U.S. National Home Price Index –which covers all nine U.S. census divisions – remained in double digits, posting a record 16.6% decline in the third quarter of 2008 versus the third quarter of 2007. This has increased from the annual declines of 15.1% and 14.0%, reported for the 2nd and 1st quarters of the year, respectively.
The 10-City and 20-City Composites continue to set new records, with annual declines of 18.6% and 17.4%, respectively.
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Fed Attacks Mortgage Rates: 4 Things to Know
Continue reading… 3 CommentsThe Federal Reserve on Tuesday announced a new approach to stabilizing the housing market: driving down mortgage rates.
The effort is based on a two-pronged program that involves buying up to $100 billion in debt of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, while at the same time purchasing up to $500 billion of mortgage-backed securities backed by Fannie, Freddie and Ginnie Mae.
The initiative is intended to lower Fannie and Freddie’s financing costs, which will enable the government-controlled, mortgage-finance giants to pass along those savings to consumers in the form of lower interest rates.
Here’s what you need to know:
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Saturday Night Live Spoofs the Auto Bailout
Continue reading… 3 CommentsThe Saturday Night Live gang is at it again, this time mocking the CEOs of Detroit’s struggling automakers, who were recently on Capitol Hill begging Congress for cash. We’ll have to see if this ends up stirring the kind of controversy that their last bailout-themed sketch did.
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Home Prices Plummet, Thank Goodness
Continue reading… 2 CommentsThe National Association of Realtors existing home sales report for October—which was released Monday—is filled with ugly-looking numbers: sales fell 3 percent from September and nearly 2 percent from a year earlier. Total housing inventory increased to a 10.2-month supply. And the national median existing home price fell by 11 percent from a year ago—its biggest drop on record—to $183,000.
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Ex-Fugee Wyclef Jean’s House in Foreclosure
Continue reading… 3 CommentsAccording to media reports, former Fugees star Wyclef Jean has snapped the curious drought in celebrity foreclosure news after failing to make payments associated with his Miami Beach house.
The Palm Beach Post reported that Jean obtained a $2-million loan in 2004 to rebuild the home, but the project subsequently hit a number of financial snags and remained “nearly abandoned” for two years.
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Citigroup’s (Second) Bailout: 7 Things to Know
Continue reading… 7 CommentsWhat happens when your stock price plunges more than 60 percent in a single week? Well, if you’re too big to fail, like Citigroup, you get another government bailout. Under the terms of the deal with federal regulators, which was unveiled Sunday, Uncle Sam will pop an additional $20 billion of taxpayer money into the New York company and backstop most of the losses exceeding $29 billion in a $306 billion pool of toxic assets. The latest rescue package comes with a variety of strings attached, such as more limits on executive compensation, a cut in Citi’s dividend, and mandatory implementation of the Federal Deposit Insurance Corp’s mortgage modification program. The development comes five weeks after Citigroup received its initial $25 billion capital infusion from the government.
Here’s what you need to know:
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Find Out Where Home Prices Are Crashing the Hardest
Continue reading… 0 CommentsThis interactive map shows which parts of the country have seen the steepest declines.
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Fannie and Freddie Suspend Foreclosures for the Holidays
Continue reading… 3 CommentsGovernment-controlled mortgage finance giants Fannie Mae and Freddie Mac are allowing a limited number of distressed borrowers to wear their construction-paper pilgrim hats and leave cookies out for Santa before deciding whether or not to toss them onto the streets.
From The Associated Press:
Mortgage finance companies Fannie Mae and Freddie Mac are suspending foreclosures for about 16,000 households during the holiday season.
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Goldman Sachs Sees (Even) Worse Recession, Higher Unemployment
Continue reading… 8 CommentsMore bad news: Goldman Sachs issued another downward revision to its economic forecast this morning. The firm says the revision is a response to tightening financial conditions, which it blames on policy impasses in Washington.
We have marked down our forecasts for US real GDP in response to continuing signs of falling domestic and foreign demand, labor market deterioration, renewed tightening in financial conditions, and an apparent impasse in fiscal policy pending the transfer of power to the Obama administration in late January. As a result, we expect the unemployment rate to reach 9% by the fourth quarter of 2009, profits to fall 25% for 2009 as a whole following an estimated 10% drop this year, and the Federal Open Market Committee (FOMC) to use nontraditional policy tools more aggressively, as detailed below…
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Neel Kashkari Appears in People’s ‘Sexiest Men Alive’ Issue
Continue reading… 3 CommentsWhile the Bush Administration has been sharply criticized for its response to the worst financial crisis since the Great Depression, at least one member of Hank Paulson’s team apparently still has some fans.
After being grilled by lawmakers over his agency’s handling of the $700 billion bailout, Neel Kashkari received a warm (steamy?) reception from the editors at People magazine, who included the 35-year-old Treasury official in their annual “Sexiest Men Alive” issue, The Wall Street Journal reports.
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Sen. Dick Durbin: Let Bankruptcy Judges Alter Distressed Mortgages
Continue reading… 3 CommentsThe issue of bankruptcy reform--allowing bankruptcy judges to change the terms of distressed mortgages on primary residences--is set to take a higher profile in next year’s congressional debate over how to fight foreclosures.
With the election putting a Barack Obama in the White House and expanding democratic majorities in Congress, bankruptcy reform’s outlook has brightened. But a tough fight with the industry looms, and enactment isn’t at all certain at this point. The industry argues that such changes to existing law would result in higher mortgage rates--the last thing the downtrodden housing market needs.
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Foreclosures in Detroit’s County Run 137 Pages (and That’s Newsprint)
Continue reading… 2 CommentsWith the heads of Detroit’s automakers on Capitol Hill this week begging the Feds to bail them out, it’s a good time to check in on the area’s housing market. As you can see from this video, the situation in the Detroit area is pretty terrifying already:
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Housing Starts, Permits Hit Record Lows
Continue reading… 0 CommentsThe government reported Wednesday that housing starts hit record lows in October, falling 4.5 percent from September and 38 percent from year-ago levels. Permits dipped to record low levels as well, plummeting 12 percent from September and 40 percent from October 2007.
And Richard Moody, chief economist at Mission Residential, says the residential construction sector isn’t done breaking records yet. “Just as in the sporting world where, we are always told, records are meant to be broken, coming months will likely see starts and permits set new lows,” he said in a report.
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How Much Bailout Cash Will Barack Obama Have?
Continue reading… 0 CommentsDuring a hearing in the House Financial Services Committee Tuesday, Treasury Secretary Hank Paulson indicated that he would leave a significant chunk of the $700 billion bailout fund for Barack Obama's new administration to allocate.
"If we have learned anything throughout this year, we have learned that this financial crisis is unpredictable and difficult to counteract," Paulson said in his prepared testimony. "So early last week, we concluded it was only prudent to reserve our TARP [Troubled Asset Relief Program] capacity, maintaining not only our flexibility, but that of the next administration."
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Map of Pain: Cities With the Largest Home Price Declines
Continue reading… 1 CommentThe National Association of Realtors said Tuesday that home prices declined in 4 out of 5 metro areas in the third quarter when compared with the same period a year earlier. The trade group blamed distressed sales—that's foreclosures and short sales—for driving the median existing single-family home price down 9 percent, to $200,500, over the period.
Here's a map showing where the declines have been the steepest:
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Home Builders to Feds: Prop Up the Housing Market
Continue reading… 0 CommentsAmid rising unemployment and continued turmoil in the financial markets, builder confidence in November dropped to record lows, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
With the index now at its lowest point since its 1985 inception, home builders are asking—you guessed it!—Uncle Sam for help:
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Are Bailout Funds for Foreclosure Mitigation? Frank Vs. Paulson
Continue reading… 9 CommentsI didn’t see the entire House Financial Services Committee hearing, but I did catch this exchange between Chairman Barney Frank, a Massachusetts Democrat, and Treasury Secretary Henry Paulson.
The exchange is a great illustration of the disagreement between Paulson and many Democrats--as well as FDIC Chairman Sheila Bair, a Republican--as to whether bailout funds should be used to prevent foreclosures.
From my transcript (I watched the hearing on C-SPAN):
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Deadbeat Trend: Distressed Homeowners Dodge Creditors in Texas
Continue reading… 1 CommentIf you’re behind on your mortgage and looking to dodge creditors, forget the Cayman Islands--Texas is the place to be.
Texas laws are apparently more lenient for debtors looking to shield assets form creditors. “Distressed borrowers can hang on to luxury cars, a primary residence, paychecks, retirement accounts, and even jewelry that creditors might claim elsewhere,” Bloomberg reports.
As a result, a growing number of troubled mortgage holders from housing boom states--like California and Florida--are moving to the “Lone Star State.”
