The Commerce Department said new-home sales rose 1.6 percent last month to a seasonally adjusted annual rate of 315,000. This is 9.8 percent above the November 2010 estimate of 287,000 and is the third consecutive month of climbing sales. Another difficult data point for Paul "We are in depression conditions" Krugman to explain away.
Showing posts with label Housing. Show all posts
Showing posts with label Housing. Show all posts
Friday, December 23, 2011
Tuesday, December 23, 2008
Home Sales and Prices Plunge
Given the continued explosion in M1, which I look at as an indicator of fear in the economy, the drop in November home sales should not come as a surprise.
Sales of both new and existing homes fell in November, and did prices.
Sales of existing homes, which include single-family homes and condos, fell 8.6% to a seasonally-adjusted annual rate of 4.49 million units in November, a 10.6% drop from a year ago, the National Association of Realtors reported Tuesday.
Meanwhile, sales of existing single-family homes plunged 8.0% to a seasonally-adjusted annual rate of 4.02 million in November from 4.37 million in October, representing the lowest sales activity since July 1997.
The national median existing home price fell to $181,300, a decline of 13.2% from a year ago, and the largest drop since the trade group began its survey in 1968. Lawrence Yun, the trade group's chief economist, said it was likely the largest decline since the Great Depression.
The total inventory of unsold existing homes rose 0.1% to 4.20 million in November, the highest since the 1980s. This represents a supply of 11.2 months, up from 10.3 months in October.
New-home sales fell for the fourth month in a row during November, and prices remained below year-earlier levels.
Sales of new single-family homes decreased by 2.9% to a seasonally adjusted annual rate of 407,000, according to the Commerce Department.
Year over year, new-home sales were 35.3% lower than the level in November 2007.
The Commerce Department report Tuesday showed there were an estimated 374,000 new homes for sale at the end of November, representing a 11.5 months' supply at the current sales rate. In October, an estimated 402,000 were for sale, an 11.8 months' inventory.
The median price of a new home plunged 11.5% to $220,400 in November from $249,100 in November 2007. The average price decreased 9.2% to $287,500 from $316,800 a year earlier. In October this year, the median price was $214,600 and the average was $279,500.
Regionally last month, new-home sales fell 7.1% in the South and 16.4% in the Midwest. Sales rose 11.0% in the West and 14.3% in the Northeast.
An estimated 28,000 homes were actually sold in November, down from 33,000 in October, based on figures not seasonally adjusted.
Given the amount of money the Fed is pumping into the system will be much, much stronger in 2009, than most expect.
Sales of both new and existing homes fell in November, and did prices.
Sales of existing homes, which include single-family homes and condos, fell 8.6% to a seasonally-adjusted annual rate of 4.49 million units in November, a 10.6% drop from a year ago, the National Association of Realtors reported Tuesday.
Meanwhile, sales of existing single-family homes plunged 8.0% to a seasonally-adjusted annual rate of 4.02 million in November from 4.37 million in October, representing the lowest sales activity since July 1997.
The national median existing home price fell to $181,300, a decline of 13.2% from a year ago, and the largest drop since the trade group began its survey in 1968. Lawrence Yun, the trade group's chief economist, said it was likely the largest decline since the Great Depression.
The total inventory of unsold existing homes rose 0.1% to 4.20 million in November, the highest since the 1980s. This represents a supply of 11.2 months, up from 10.3 months in October.
New-home sales fell for the fourth month in a row during November, and prices remained below year-earlier levels.
Sales of new single-family homes decreased by 2.9% to a seasonally adjusted annual rate of 407,000, according to the Commerce Department.
Year over year, new-home sales were 35.3% lower than the level in November 2007.
The Commerce Department report Tuesday showed there were an estimated 374,000 new homes for sale at the end of November, representing a 11.5 months' supply at the current sales rate. In October, an estimated 402,000 were for sale, an 11.8 months' inventory.
The median price of a new home plunged 11.5% to $220,400 in November from $249,100 in November 2007. The average price decreased 9.2% to $287,500 from $316,800 a year earlier. In October this year, the median price was $214,600 and the average was $279,500.
Regionally last month, new-home sales fell 7.1% in the South and 16.4% in the Midwest. Sales rose 11.0% in the West and 14.3% in the Northeast.
An estimated 28,000 homes were actually sold in November, down from 33,000 in October, based on figures not seasonally adjusted.
Given the amount of money the Fed is pumping into the system will be much, much stronger in 2009, than most expect.
Tuesday, October 28, 2008
Home Prices Post Record Decline
The housing market continues to adjust from the bubble days.
The S&P/Case-Shiller home-price indexes showed home prices in 10 major metropolitan areas fell a record 17.7% in August from a year earlier and 1.1% from July.
Falling prices will help the market clear the supply overhang and, as a bonus,will make housing much more affordable. Given the likely inflation ahead, it's probably a very good time to start looking for your dream house.
The S&P/Case-Shiller home-price indexes showed home prices in 10 major metropolitan areas fell a record 17.7% in August from a year earlier and 1.1% from July.
Falling prices will help the market clear the supply overhang and, as a bonus,will make housing much more affordable. Given the likely inflation ahead, it's probably a very good time to start looking for your dream house.
Friday, October 17, 2008
Housing Starts at Slowest Pace Since 1991
An important factor in clearing out the huge supply of homes on the market is for builders to slow building. This is occurring.
The Commerce Department reports that construction of new homes and apartments dropped 6.3 percent last month. It pushed total production to an annual rate of 817,000 units SA. That’s the slowest pace since January 1991.
The declines last month reflected weakness in many parts of the country. It was led by a 20.9 percent drop in the Northeast, where construction of single-family units dropped to the lowest level on record.
The Commerce Department reports that construction of new homes and apartments dropped 6.3 percent last month. It pushed total production to an annual rate of 817,000 units SA. That’s the slowest pace since January 1991.
The declines last month reflected weakness in many parts of the country. It was led by a 20.9 percent drop in the Northeast, where construction of single-family units dropped to the lowest level on record.
Wednesday, September 17, 2008
Housing Starts at 17-1/2-Year Low
Housing starts in August were down a whopping 33 percent from year earlier levels.
The starts on new homes was a 17-1/2 year low, the Commerce Department reported today.
Starts on new homes dropped to 895,000, their lowest since January 1991.
The August rate of starts on single-family homes fell 1.9 percent to 630,000, which also was the softest rate since the start of 1991.
While many are calling this number "bleak", it is actually a good thing in the that the fewer number of new starts, the sooner the huge number of homes that are now in inventory and up for sale will be cleared from the market.
-Robert Wenzel
The starts on new homes was a 17-1/2 year low, the Commerce Department reported today.
Starts on new homes dropped to 895,000, their lowest since January 1991.
The August rate of starts on single-family homes fell 1.9 percent to 630,000, which also was the softest rate since the start of 1991.
While many are calling this number "bleak", it is actually a good thing in the that the fewer number of new starts, the sooner the huge number of homes that are now in inventory and up for sale will be cleared from the market.
-Robert Wenzel
Friday, September 12, 2008
Alert: Paulson Speaks on The Economy and Housing Tuesday September 16
Details:
Tuesday, September 16, 2008, 1:30 p.m. EDT
Secretary Henry M. Paulson, Jr.
Remarks on the Economy & the Housing Market
The Brookings Institution
Falk Auditorium
1775 Massachusetts Avenue, NW
Washington, D.C.
Secretary Henry M. Paulson, Jr.
Remarks on the Economy & the Housing Market
The Brookings Institution
Falk Auditorium
1775 Massachusetts Avenue, NW
Washington, D.C.
-EPJ Newsdesk
Tuesday, September 9, 2008
Pending Home Sales Down
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, fell 3.2 percent to 86.5 from an upwardly revised reading of 89.4 in June, which had risen 5.8 percent from May. The July index remains 6.8 percent below July 2007 when it stood at 92.8, according to the National Association of Realtors.
The PHSI in the Midwest rose 2.8 percent to 81.6 in July but remains 2.4 percent below a year ago. In the South the index was unchanged, holding at 93.7, but is 13.4 percent below July 2007. The index in the Northeast fell 7.5 percent to 73.6 in July and is 13.2 percent below a year ago. In the West, the index dropped 10.6 percent to 90.3 but is 6.5 percent higher than July 2007.
The PHSI in the Midwest rose 2.8 percent to 81.6 in July but remains 2.4 percent below a year ago. In the South the index was unchanged, holding at 93.7, but is 13.4 percent below July 2007. The index in the Northeast fell 7.5 percent to 73.6 in July and is 13.2 percent below a year ago. In the West, the index dropped 10.6 percent to 90.3 but is 6.5 percent higher than July 2007.
Saturday, September 6, 2008
Carlyle To Buy Distressed Apartments
File under: "Buying while there is blood in the streets."
GFI Capital Resources Group and The Carlyle Group formed a $300 million joint venture to buy distressed residential apartment buildings, said Michael Weiser, executive vice president of acquisitions and dispositions at GFI, a Manhattan-based diversified real estate company.
The venture will leverage that cash to buy $1.2 billion worth of properties.
Weiser said the driving force of the venture was to capitalize on the deteriorating real estate market which is forcing some owners to sell buildings at deep discounts. He says GFI has a history of buying buildings in down markets.
“There is going to be a lot of opportunity out there,” said Weiser.
GFI Capital Resources Group and The Carlyle Group formed a $300 million joint venture to buy distressed residential apartment buildings, said Michael Weiser, executive vice president of acquisitions and dispositions at GFI, a Manhattan-based diversified real estate company.
The venture will leverage that cash to buy $1.2 billion worth of properties.
Weiser said the driving force of the venture was to capitalize on the deteriorating real estate market which is forcing some owners to sell buildings at deep discounts. He says GFI has a history of buying buildings in down markets.
“There is going to be a lot of opportunity out there,” said Weiser.
Friday, September 5, 2008
Four Million Homeowners With Mortgage Problems
The Mortgage Bankers Association is reporting that more than 4 million American homeowners with a mortgage - a record 9 percent - were either behind on their payments or in foreclosure at the end of June.
The latest quarterly figures broke records for late payments, homes entering the foreclosure process and for the inventory of loans in foreclosure. The trade group's records go back to 1979.
The percentage of loans at least one month past due or in foreclosure was up from 8.1 percent in the January-March quarter, and up from 6.5 percent a year ago, using figures that were not adjusted for seasonal factors.
New foreclosures rose from the first quarter in 35 states and Washington, D.C. The biggest increases were in Nevada, Florida, California, Arizona, Michigan, Rhode Island, Indiana and Ohio.New foreclosures actually declined in Texas, Massachusetts and Maryland. Both Maryland and Massachusetts recently passed laws to slow the foreclosure process and give borrowers more time to catch up on their payments.
Almost 500,000 homeowners, or about 1 percent, entered the foreclosure process in the second quarter.
But for the first time since the mortgage crisis started, delinquencies on subprime adjustable-rate loans declined. While more than one out of every five homeowners with a subprime ARM is still in default, that portion dipped 1 percentage point from the first quarter to 21 percent.
What's driving up the delinquency rate now is the number of homeowners with risky, adjustable-rate prime loans made with little or no proof of the borrowers' income or assets.
More than one out of 10 borrowers with a prime ARM is now delinquent or in foreclosure. That portion, 11.3 percent, was up from 9.7 percent in the first quarter, and is expected to rise as more homeowners see their monthly payments spike.
Many of these loans allowed the borrower to pay only the interest on the loan for a fixed period. Others gave the borrower the option to "pick-a-payment," adding any unpaid interest to the principal balance.
With home prices plummeting, particularly in California, Nevada, Arizona and Florida, many borrowers with these exotic loans now owe more on their homes than they are worth.
Worse still, these loans reset to higher monthly payments when borrowers reach maximum debt limits - typically around 10 to 25 percent more than the original loan.
Those resets can increase the borrower's monthly payment by more than $1,000 a month on average, Fitch Ratings said in a report this week.
And nearly half of these pay-option loans are expected to reset to higher monthly payments by the end of 2010, Fitch said.
Source AP via NyPo
Wednesday, August 27, 2008
Upper End of Housing Market Showing Some Stability
Dean Baker breaks down the latest Case-Shiller housing prices:
[A]n examination of the tiered indices (these show separately the movement of house prices in each city for cheapest third of houses, the middle third, and upper third) indicates a sharp divergence within many markets. In several of the former bubble markets higher end home prices appear to be stabilizing, while prices for homes in the bottom tier continue to fall rapidly.
For example, in Los Angeles prices in the bottom third of the market fell by 3.2 percent in June, while prices in the top third fell by just 0.2 percent. Over the last quarter, prices for homes in the bottom tier fell at a 12.2 percent annual rate, while prices in the top tier dropped at just a 0.8 percent rate.
There’s a similar story in Miami, where prices in the bottom tier fell at a 14.5 percent annual rate over the last quarter, while prices in the top tier fell at just a 4.2 percent rate. Over the last year, prices in the bottom tier have fallen 31.6 percent, which is not much larger than the 25.3 percent decline in prices for houses in the top tier. There’s a similar story in Las Vegas, Phoenix, San Diego, and San Francisco.
Home Prices Still Falling
According to the latest Case-Shiller index, in the 12 months through June, American home values dropped 15.9 percent, the biggest annual decline on record.
Of the 20 cities surveyed for the index , Las Vegas suffered the largest annual decline, with values dropping 28.6 percent in the last year. Prices in Miami fell 28.3 percent, and values in Phoenix dropped 27.9 percent in the same period.
In June, nine cities recorded an increase in home values from the month before, with prices in Boston, Denver and Minneapolis all up at least 1 percent. That compared with increases in seven cities in May. For all 20 cities, prices fell 0.5 percent in June, after a 0.9 percent decline in May.
Of the 20 cities surveyed for the index , Las Vegas suffered the largest annual decline, with values dropping 28.6 percent in the last year. Prices in Miami fell 28.3 percent, and values in Phoenix dropped 27.9 percent in the same period.
In June, nine cities recorded an increase in home values from the month before, with prices in Boston, Denver and Minneapolis all up at least 1 percent. That compared with increases in seven cities in May. For all 20 cities, prices fell 0.5 percent in June, after a 0.9 percent decline in May.
Tuesday, August 19, 2008
Crashing Housing Starts: Is It A Good Number or a Bad Number?
Floyd Norris takes the conventional view:
I say this is a great number. With housing inventories bursting at the seems, the last thing you need is a huge bundle of new houses coming on the market. The fact that new housing starts are crashing is a sign that basic economic principles work. No need for government intervention. There is a glut of houses on the market so the construction of houses has declined to levels not seen since Donald Trump was probably playing in his jammies with an erector set
Father Market is patrolling and has signaled to the construction kids to stop for awhile, and they are.
How bad are the new housing start numbers? Horrid.
Here’s one statistic: The government calculates that construction began on 59,000 single family homes in July. The last time that few homes were started in a July was, well, we don’t know. It was before 1959, when the government started counting housing starts.
I say this is a great number. With housing inventories bursting at the seems, the last thing you need is a huge bundle of new houses coming on the market. The fact that new housing starts are crashing is a sign that basic economic principles work. No need for government intervention. There is a glut of houses on the market so the construction of houses has declined to levels not seen since Donald Trump was probably playing in his jammies with an erector set
Father Market is patrolling and has signaled to the construction kids to stop for awhile, and they are.
Former-IMF Economist:A Whopper Bank Failure Is Coming
The worst of the global financial crisis is yet to come and a large U.S. bank will fail in the next few months as the world’s biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff said on today.
”The U.S. is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say ’the worst is to come’,” he told a financial conference.
”We’re not just going to see mid-sized banks go under in the next few months, we’re going to see a whopper, we’re going to see a big one, one of the big investment banks or big banks,” said Rogoff, who is an economics professor at Harvard University and was the International Monetary Fund’s chief economist from 2001 to 2004.
”We have to see more consolidation in the financial sector before this is over,” he said, when asked for early signs of an end to the crisis.
”Probably Fannie Mae and Freddie Mac -- despite what U.S. Treasury Secretary Hank Paulson said -- these giant mortgage guarantee agencies are not going to exist in their present form in a few years.”
Rogoff said multi-billion dollar investments by sovereign wealth funds from Asia and the Middle East in western financial firms may not necessarily result in large profits because they had not taken into account the broader market conditions that the industry faces.
”There was this view early on in the crisis that sovereign wealth funds could save everybody. Investment banks did something stupid, they lost money in the sub-prime, they’re great buys, sovereign wealth funds come in and make a lot of money by buying them.
Rogoff said the U.S. Federal Reserve was wrong to cut interest rates as ”dramatically” as it did.
”Cutting interest rates is going to lead to a lot of inflation in the next few years in the United States.”
”That view neglects the point that the financial system has become very bloated in size and needed to shrink,” Rogoff told the conference in Singapore, whose wealth
”The U.S. is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say ’the worst is to come’,” he told a financial conference.
”We’re not just going to see mid-sized banks go under in the next few months, we’re going to see a whopper, we’re going to see a big one, one of the big investment banks or big banks,” said Rogoff, who is an economics professor at Harvard University and was the International Monetary Fund’s chief economist from 2001 to 2004.
”We have to see more consolidation in the financial sector before this is over,” he said, when asked for early signs of an end to the crisis.
”Probably Fannie Mae and Freddie Mac -- despite what U.S. Treasury Secretary Hank Paulson said -- these giant mortgage guarantee agencies are not going to exist in their present form in a few years.”
Rogoff said multi-billion dollar investments by sovereign wealth funds from Asia and the Middle East in western financial firms may not necessarily result in large profits because they had not taken into account the broader market conditions that the industry faces.
”There was this view early on in the crisis that sovereign wealth funds could save everybody. Investment banks did something stupid, they lost money in the sub-prime, they’re great buys, sovereign wealth funds come in and make a lot of money by buying them.
Rogoff said the U.S. Federal Reserve was wrong to cut interest rates as ”dramatically” as it did.
”Cutting interest rates is going to lead to a lot of inflation in the next few years in the United States.”
”That view neglects the point that the financial system has become very bloated in size and needed to shrink,” Rogoff told the conference in Singapore, whose wealth
Housing Starts and Permits Tumble in July
Home building projects started in July fell 11 percent to the lowest annual rate in more than 17 years, on a seasonally adjusted basis, while building permits tumbled 17.7 percent, the Commerce Department reported today.
The annual pace of housing starts at 965,000 was the lowest since a 921,000 unit rate in March 1991.
Building permits, an indicator of future construction, dropped to an annual rate of 937,000.
The magnitude of the drop in permits was the biggest since a plunge of almost 24 percent in February 1990, while the number was the lowest since March this year, when they were 932,000.
Single family homes, which constitute the bulk of new housing, were especially weak. The annual unit rate of 641,000 single family homes started in July was the lowest since January 1991, when they were 604,000. Building permits were 584,000, the lowest since 523,000 in August 1982.
The annual pace of housing starts at 965,000 was the lowest since a 921,000 unit rate in March 1991.
Building permits, an indicator of future construction, dropped to an annual rate of 937,000.
The magnitude of the drop in permits was the biggest since a plunge of almost 24 percent in February 1990, while the number was the lowest since March this year, when they were 932,000.
Single family homes, which constitute the bulk of new housing, were especially weak. The annual unit rate of 641,000 single family homes started in July was the lowest since January 1991, when they were 604,000. Building permits were 584,000, the lowest since 523,000 in August 1982.
Wednesday, July 30, 2008
Tax "Credit" In Housing Bill Is Really Just A Loan
More details are pouring out of the 600 page Housing "Rescue" Bill. The latest: The $ 7,500 credit for new homeowners is not really a credit. It's a loan. Those who qualify to receive this "credit" will receive 10% of the purchase price of their home -- up to $7,500, in the first year. Then they will repay the loan over a 15-year period, starting in the second year after the taxable year in which the house is purchased.
Those who haven't owned a principal residence for three years before buying the new home qualify for the "credit".. If you've owned a vacation home or timeshare, you will still qualify.
Those who haven't owned a principal residence for three years before buying the new home qualify for the "credit".. If you've owned a vacation home or timeshare, you will still qualify.
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