The cessation at the end of March of the government program to buy mortgage-backed securities will show whether the White House and Federal Reserve have effectively stimulated the lending market to the point that it is now on solid footing.
If the sector slumps again, home owners could face a new period of distress.
Keeping mortgage rates at record lows was a major component of the economic strategy during President Obama's first year in office. While it did not garner the kind of headlines that efforts to bail out banks did, the policy did help revitalize home buying in parts of the country and assisted millions of home owners who were able to refinance.
Source: Washington Post, David Cho, Neil Irwin, and Dina ElBoghdady (01/25/10)
Friday, January 29, 2010
New home sales continue to decline
New home sales fell 7.6 percent in December, the U.S. Commerce Department reported Wednesday. This was the second straight month that new home sales declined. The Commerce Department also reported that new home sales in 2009 were down 22.9 percent compared with 2008, hitting a record low of 374,000 units. The Federal Reserve responded by leaving short-term lending rates at near zero and pledged to keep them low. "This report does not totally ruin the notion that housing is recovering, but it does underscore the fragility of that recovery. It's not good news for broader economic growth," said Dana Saporta, an economist at Stone & McCarthy Research in Princeton, New Jersey.
Source: Reuters News, Lucia Mutikani (01/27/2010)
Source: Reuters News, Lucia Mutikani (01/27/2010)
Mixed messages for home price
Data through November 2009, released today by Standard & Poor's for its S&P/Case-Shiller Home Price Indices show that the annual rates of decline of the 10-City and 20-City Composites continue to improve, in spite of price declines being measured across many markets during November. This marks approximately 10 months of improved readings in the annual statistics, beginning in early 2009, and is the third consecutive month these statistics have registered single digit declines, after 20 consecutive months of double digit declines.
Four of the markets-Charlotte, Las Vegas, Seattle and Tampa-posted new low index levels as measured by the past four years. In other words, any gains they might have seen in recent months have been erased and November is now considered their current trough value. On the flip side, there are still some markets that continue to improve month-over-month. Los Angeles, Phoenix, San Diego and San Francisco have seen prices increase for at least six consecutive months. Looking at the annual figures, four markets-Dallas, Denver, San Diego and San Francisco-have finally entered positive territory, something we really haven't seen in at least two years in most markets.
Charlotte, Las Vegas, Seattle and Tampa all reached new low levels in November. For Las Vegas, in particular, prices have declined for 39 consecutive months, with a peak-to-trough reading of -55.6%. It is now just 4% above its January 2000 level. This compares to its peak in August 2006, when the average home price was 135% above that same level.
Four of the markets-Charlotte, Las Vegas, Seattle and Tampa-posted new low index levels as measured by the past four years. In other words, any gains they might have seen in recent months have been erased and November is now considered their current trough value. On the flip side, there are still some markets that continue to improve month-over-month. Los Angeles, Phoenix, San Diego and San Francisco have seen prices increase for at least six consecutive months. Looking at the annual figures, four markets-Dallas, Denver, San Diego and San Francisco-have finally entered positive territory, something we really haven't seen in at least two years in most markets.
Charlotte, Las Vegas, Seattle and Tampa all reached new low levels in November. For Las Vegas, in particular, prices have declined for 39 consecutive months, with a peak-to-trough reading of -55.6%. It is now just 4% above its January 2000 level. This compares to its peak in August 2006, when the average home price was 135% above that same level.
Freddie Mac CEO: housing is near bottom
The inventory of foreclosed houses still hampers the recovery of the housing sector, but overall, the U.S. housing market appears to be at or near bottom, Freddie Mac CEO Charles Haldeman told the Detroit Economic Club on Tuesday. He predicted that the 30-year fixed mortgage rate would remain between 5 percent and 6 percent through 2010. "The big downside risk to all this is a large wave of homes now in foreclosure potentially hitting the market at prices that are destructive," Haldeman said.
Source: Reuters News, Soyoung Kim (01/26/2010)
Source: Reuters News, Soyoung Kim (01/26/2010)
Housing supplies steadily declining
New data from Altos Research shows that housing supplies have been steadily declining for the last 16 months. The company says there are 20 percent fewer homes for sale now than there were in 2008. Some fear this decline is because banks have been holding back their repossessed properties, but Altos doesn't expect this so-called shadow inventory to result in a real estate day of reckoning in 2010 as some market observers have warned.
Scott Sambucci, VP of data analytics at Altos Research, says the industry won't see any effects from the supply of homes lurking in the darkness until inventory levels pick up. And he doesn't foresee that happening anytime soon, primarily because banks have no immediate motivation to offload these assets from their balance sheets, and are keenly aware that a sudden jump in the number of homes on the market could be detrimental to already-fragile property values. With a smaller selection of inventory, buyers will pay a higher price-the rudimentary concept of supply and demand. Sambucci says he's already seen definite evidence of a price floor in 2009. Home price statistics started out 2010 on a good foot, according to Altos' data, with seven-day moving averages within the company's index bouncing off their lows and starting to tick up. In addition, the number of homes with price reductions and the magnitude of these discounts are diminishing, although Sambucci says that could indicate buyers' willingness to pay more or it could just mean sellers are becoming more realistic about what they can get. Either way, price reduction stats, while still elevated, are moving in the right direction, he says.
Altos' researchers expect to see some seasonal bounce back in prices and short-term strength in the coming months as a result of government stimulus, such as the homebuyer tax credit and the last of the Federal Reserve's purchases of mortgage securities. But Sambucci says that momentum will likely fall off toward the latter half of 2010, and any price gains seen this year will be lost as the government programs wind down. Altos Research expects home prices to start 2011 at the same level they are now in early 2010. Sambucci explained that if inventory continues to decline, by next year price points should become more attractive and activity can still be sustained.
Source: DSNews.com, Carrie Bay (01/27/2010)
Scott Sambucci, VP of data analytics at Altos Research, says the industry won't see any effects from the supply of homes lurking in the darkness until inventory levels pick up. And he doesn't foresee that happening anytime soon, primarily because banks have no immediate motivation to offload these assets from their balance sheets, and are keenly aware that a sudden jump in the number of homes on the market could be detrimental to already-fragile property values. With a smaller selection of inventory, buyers will pay a higher price-the rudimentary concept of supply and demand. Sambucci says he's already seen definite evidence of a price floor in 2009. Home price statistics started out 2010 on a good foot, according to Altos' data, with seven-day moving averages within the company's index bouncing off their lows and starting to tick up. In addition, the number of homes with price reductions and the magnitude of these discounts are diminishing, although Sambucci says that could indicate buyers' willingness to pay more or it could just mean sellers are becoming more realistic about what they can get. Either way, price reduction stats, while still elevated, are moving in the right direction, he says.
Altos' researchers expect to see some seasonal bounce back in prices and short-term strength in the coming months as a result of government stimulus, such as the homebuyer tax credit and the last of the Federal Reserve's purchases of mortgage securities. But Sambucci says that momentum will likely fall off toward the latter half of 2010, and any price gains seen this year will be lost as the government programs wind down. Altos Research expects home prices to start 2011 at the same level they are now in early 2010. Sambucci explained that if inventory continues to decline, by next year price points should become more attractive and activity can still be sustained.
Source: DSNews.com, Carrie Bay (01/27/2010)
Fed sees signs of recovery
The Federal Reserve offered its most upbeat economic outlook in nearly a year at the conclusion of its regular two-day policy meeting recently. After emerging from the closed-door assembly, the Fed committee issued a statement that touted improvements in the labor market and business spending, but cautioned, recovery is likely to be moderate for a time." Taken directly, it may not sound like a rave review, but when you compare it to what Fed officials have been saying since last April-Economic activity is likely to remain weak for a time-it's certainly an improvement.
Even with the rosier outlook, the Federal Reserve committee voted to keep the target range for its benchmark federal funds rate at 0 to 0.25 percent, and noted that "economic conditions...are likely to warrant exceptionally low levels of the federal funds rate for an extended period." The decision to maintain the near-zero rate, though, was not unanimous - the first dissenting vote among Fed policymakers since January 2009, according to a CNN report. Thomas M. Hoenig, Kansas City Fed president, said economic conditions had improved enough to make exceptionally low rates "no longer warranted," according to the central bank's statement. Fed officials are holding to their plans of pulling back from the secondary market in the coming months. The committee confirmed that its program to purchase mortgage-backed securities (MBS) and debt from the GSEs will come to a close on March 31, as previously signaled. By that time, the Fed says it will have bought $1.25 trillion of MBS and about $175 billion of agency debt. The Federal Reserve has already begun to slow the pace of these purchases to help facilitate a smooth transition when the agency makes its exit.
Source: DSNews.com, Carrie Bay (01/27/2010)
Even with the rosier outlook, the Federal Reserve committee voted to keep the target range for its benchmark federal funds rate at 0 to 0.25 percent, and noted that "economic conditions...are likely to warrant exceptionally low levels of the federal funds rate for an extended period." The decision to maintain the near-zero rate, though, was not unanimous - the first dissenting vote among Fed policymakers since January 2009, according to a CNN report. Thomas M. Hoenig, Kansas City Fed president, said economic conditions had improved enough to make exceptionally low rates "no longer warranted," according to the central bank's statement. Fed officials are holding to their plans of pulling back from the secondary market in the coming months. The committee confirmed that its program to purchase mortgage-backed securities (MBS) and debt from the GSEs will come to a close on March 31, as previously signaled. By that time, the Fed says it will have bought $1.25 trillion of MBS and about $175 billion of agency debt. The Federal Reserve has already begun to slow the pace of these purchases to help facilitate a smooth transition when the agency makes its exit.
Source: DSNews.com, Carrie Bay (01/27/2010)
Thursday, January 7, 2010
Allen Craven received the Boys & Girls Club of America's National Service Medallion.
By Meghan Cooke - macooke@newsofcabarrus.com
Allen Craven of Concord recently received the Boys & Girls Club of America's National Service Medallion. Photo courtesy of the Boys & Girls Club of Cabarrus County.
Allen Craven remembers playing basketball and football, singing in the choir and going to summer camp at the Boys & Girls Club of Cabarrus County.
He remembers when former President Jimmy Carter came to the Club's annual pancake day during his campaign, and he remembers shooting a BB gun at a turkey shoot. But his best memories involve being around the kids.
After more than 50 years of memories at the Club, Craven recently received the Boys & Girls Clubs of America's National Service Medallion, a national award that recognizes board members and volunteers for their service to the Boys & Girls Club through leadership, development of programs or projects or fundraising efforts.
Craven, a 60-year-old Concord native and owner broker of Weichert Realtors - Craven & Co., has held many roles at the Club. He's been a member of the board of directors since 1991, has held several positions, including president and vice president, and has served on several committees in addition to volunteering as a basketball coach.
Whether it's behind the scenes or on the sidelines of a basketball court, Craven has contributed countless hours of time and energy in devotion to the Club.
"He will take whatever role is necessary," said Mike Blackwelder, development director of the Boys & Girls Club of Cabarrus County. "On any occasion, he's more than happy to stand up."
He was chairman of the committee responsible for raising $6 million for the construction of the Club's facility on Spring Street Northwest in Concord.
An avid golfer, Craven has also organized the Uwharrie Golf Classic, a golf tournament at Old North State Club in New London, for the past seven years. The tournament raises about $30,000 for the Club every year.
The Boys & Girls Club teaches children important life lessons, especially teamwork, Craven said as he recalled coaching basketball.
"You may be a super athlete or you may not be able to dribble a basketball, but everyone plays," he said. "It's about making everyone better through sportsmanship and playing fair."
For Craven, involvement in the Club is a family tradition. His father, Dr. Fred Craven, was one of the founding directors of the Club, and now his son, Ford, is also an active volunteer.
At the groundbreaking ceremony, both Craven and his father were on hand, their feet steadied on top of shovels plunged into what would become the Club's new facility.
He said he's received only one other recognition that means more to him than his recent award: a "Man and Boy" award from the Club that he shared with his father in the 1980s.
Allen Craven of Concord recently received the Boys & Girls Club of America's National Service Medallion. Photo courtesy of the Boys & Girls Club of Cabarrus County.
Allen Craven remembers playing basketball and football, singing in the choir and going to summer camp at the Boys & Girls Club of Cabarrus County.
He remembers when former President Jimmy Carter came to the Club's annual pancake day during his campaign, and he remembers shooting a BB gun at a turkey shoot. But his best memories involve being around the kids.
After more than 50 years of memories at the Club, Craven recently received the Boys & Girls Clubs of America's National Service Medallion, a national award that recognizes board members and volunteers for their service to the Boys & Girls Club through leadership, development of programs or projects or fundraising efforts.
Craven, a 60-year-old Concord native and owner broker of Weichert Realtors - Craven & Co., has held many roles at the Club. He's been a member of the board of directors since 1991, has held several positions, including president and vice president, and has served on several committees in addition to volunteering as a basketball coach.
Whether it's behind the scenes or on the sidelines of a basketball court, Craven has contributed countless hours of time and energy in devotion to the Club.
"He will take whatever role is necessary," said Mike Blackwelder, development director of the Boys & Girls Club of Cabarrus County. "On any occasion, he's more than happy to stand up."
He was chairman of the committee responsible for raising $6 million for the construction of the Club's facility on Spring Street Northwest in Concord.
An avid golfer, Craven has also organized the Uwharrie Golf Classic, a golf tournament at Old North State Club in New London, for the past seven years. The tournament raises about $30,000 for the Club every year.
The Boys & Girls Club teaches children important life lessons, especially teamwork, Craven said as he recalled coaching basketball.
"You may be a super athlete or you may not be able to dribble a basketball, but everyone plays," he said. "It's about making everyone better through sportsmanship and playing fair."
For Craven, involvement in the Club is a family tradition. His father, Dr. Fred Craven, was one of the founding directors of the Club, and now his son, Ford, is also an active volunteer.
At the groundbreaking ceremony, both Craven and his father were on hand, their feet steadied on top of shovels plunged into what would become the Club's new facility.
He said he's received only one other recognition that means more to him than his recent award: a "Man and Boy" award from the Club that he shared with his father in the 1980s.
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