May 31, 2013
Housing affordability. From the data, homes are more affordable than ever these days. As the cost has come down and incomes remain somewhat stable, the ZIRP (Zero Interest Rate Policy) of the Fed is allowing for more people to “enjoy” home ownership.
The chart below provides a glimpse into the historical range of “affordability” using a couple of different metrics. Note that there is also an axis that gives an indication when renting or owning Read more
September 29, 2010
The latest reading for the mortgage applications shows a slight switch. Now the report shows that the applications that came in are for purchases and a smaller amount refinances. That is good news for the housing market in general. At least there is some Read more
August 27, 2010
You have just got to wonder where the relief will come from for the housing markets. It is not with rates, it is not with easy loans and unless the govy decides to throw the homebuilders and buyers another bone there surely is going to be another leg down in pricing to come.
Actually, either way there will be another wave of pricing weakness as the months of inventory for existing homes rises past 12.
The biggest slowdown in sales (existing homes) came from the Midwest which had a 35% drop in July. This compares to a 7.5% drop in June. At the same time, as the Western region saw a slight rise in the average price (+$8,000) per sale, the Midwest saw a more modest increase (+$500) and the South was the only region to record a lower selling price (-$3,000).
Perhaps this is a sign that the markets with the greatest overbuild Read more
February 17, 2008
Another week, another report. Once again it is going to be a fun ride.
Housing starts are going to be a key concern and looking at a consensus that matches prior reports, it is clear that most are very worried about the fact that there is little buying activity. The same day, building permits are revealed for January. That will be a double-whammy for the markets. If there these numbers come in anywhere near expectation (above or below), we are apt to see nice rally.
One the proverbial other hand, disappointment will be painful for Mr. Dow.
Then there is the CPI. Besides the fact that it is reported on the same day as the housing indicators, on Feb 20, the CPI will show if Benanke has been right all along in calling for slight inflationary pressures. The problem is that he realizes that some of the inflationary pressure is due to the massive exports we are experiencing. Of course these would not be as intense if we had a stronger dollar, but that is old news.
Balancing the hope for consumers and home buyers versus a need to keep inflation down is the job of the FED and these days it is more difficult than ever. It would seem that one thing is for sure…unless he has a few more tricks up his sleeve, we are going to be in for a long and tough 2008.