Economists and others weigh in on . Home sales appear to have hit a bottom but expect only a very modest upswing in coming months. While housing affordability is extremely elevated — reflecting the combined forces of low prices and low mortgage rates — it will be difficult for sales to show much improvement as long as the unemployment rate is on the rise. Moreover, the influx of foreclosures onto the market is expected to act as a significant headwind for home prices — although we do expect the pace of home price declines to begin to slow noticeably in coming months. –David Greenlaw, Morgan Stanley Single-family home sales look to have bottomed out in the last six months although a very large percentage of the sales (45% in April according to the NAR) are distressed sales (foreclosure sales are only recorded in these data if the home is listed on the MLS, which suggests that these data both understate sales and the proportion of sales that are distressed). –RDQ Economics > Part of the market clearing process is that distressed properties must be sold, so the fact that this is occurring is good. Still, it certainly depresses prices, and there are plenty more foreclosed (or soon to be foreclosed) homes in the pipeline. The inescapable conclusion, therefore, is that median sales prices will continue to decline for the foreseeable future. –Joshua Shapiro, MFR Inc. While we believe sales will increase in the short-run, the medium-term picture is more difficult to judge. With such a large share of market being distressed sales, any eventual fall in the supply of distressed properties could restrain total sales for a time. –Abiel Reinhart, J.P. Morgan Falling prices , incentives such as the first-time buyer tax credit, and increasingly aggressive investors eager to snap up properties, mainly to turn into rentals, are sparking sales on the low end of the market, but sales of higher-end homes are stagnating. According to NAR, 45 percent of all sales in April were distress...

Today we take a look at the health of and commercial property markets around the world. Slowing economic activity and a credit crunch contributed to a decline in housing activity, prices and construction in most major economies. Eastern Europe and the Baltics, as well as the U.S. and UK, have endured some of the sharpest declines. In many countries, not only in the U.S., the bottom of the property markets still seems far off, with sales, prices and starts forecast to continue declining, albeit at a slower pace, through much of 2009. In fact, many European economies (and Canada) tend to have housing cycles that lag behind the U.S. by about 2-3 years, suggesting that their declines could also persist beyond a U.S. housing stabilization. Sounder lending standards and lower incentives to invest in residential property in some countries may allow them to avoid the depths of the U.S. property correction but others may suffer more severely. The liquidity resulting from quantitative easing has contributed to a slower deterioration of the housing markets. Yet with high inventories in many markets, it may take some time to absorb the excess. This will continue to erode the value of asset-backed securities and banks' balance sheets and defer the revival of construction activity, a major driver of growth. The decline in retail trade and contraction of the financial sector has worsened the . Commercial vacancy rates are on the rise in almost all major centers in Europe and North America and net effective rates have declined by 25-30% in major cities in Asia, suggesting that new investment is unlikely as these cities try to absorb overcapacity in retail and hotel trade. Meanwhile, still tight corporate debt markets pose obstacles for corporate finance. Despite the weak fundamentals, REITs and other property investments have benefited from the renewed risk appetite and have been climbing off late. These property investments might well be vulnerable to any reversal of risk appetite...

The Federal Reserve Board is commissioning a of everyone who participated in its most recent . The National Opinion Research Center at the University of Chicago , which conducts the triennial survey, will re-interview each person that responded to the 2007 survey to see how the economic downturn affected their personal finances. The Survey of Consumer Finances is among the richest sources of information about American consumers’ wealth, assets and debts. “Now we’ll have two points in time,” explains Cathy Haggerty , the project director at the NORC. “We’ll have data before the economic downturn and we’ll be able to compare it to a point in time after the economic downturn.” The Fed, which pays the NORC to conduct the surveys, didn’t plan to conduct a follow-up but requested one because of the drastic economic changes. It’s “absolutely” a rare request, Haggerty says. It’s also a difficult undertaking, covering about 4,500 people. “This is a very long and somewhat intrusive survey,” Haggerty says. “We ask people about every aspect of their finances. For the most wealthy it can be hours long.” Results of the re-interview likely won’t be released until the third quarter of 2010, Haggerty said. The Fed is considering using follow-up interviews with regularity. The NORC plans to start a pilot program using two test groups from the regularly scheduled 2010 survey. One group would receive a shortened follow up and the other would participate in the full-length survey a second time.

WASHINGTON (Reuters) - The number of problem U.S. banks and thrifts rose to 305 in the first quarter of 2009, up 40 percent from 252 in the prior quarter, marking the highest number since 1994, the Federal Deposit Insurance Corp said on Wednesday.

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G.M. prepared for a bankruptcy filing, as bondholders rejected an offer to exchange $27 billion in debt for stock.

North Korea threatens South Korea militarily, saying it’s no longer bound by a truce the two sides reached in 1953 to end the Korean War.

The U.S. government will eventually adopt a 'bad bank' plan to purchase toxic assets from struggling lenders, despite avoiding such a solution so far, accountancy firm PricewaterhouseCoopers says.

“We’re about to have a big problem. Foreclosures were bad last year? It’s going to get worse.” -Morris A. Davis, a real estate expert at the University of Wisconsin. This is a theme I have been hammering on for some time: As more people lose their jobs, we will see increasing foreclosures, adding further stress to banks’ already ugly balance sheets. As the New York Times notes, the number of prime mortgages that were “delinquent at least 90 days, were in foreclosure or had deteriorated to the point that the lender took possession of the home” jumped enormously as job losses accelerated. Over the period when BLS was reporting 500k plus job losses a month, from November’08 to February ‘09, the numbers of distressed properties “increased more than 473,000, exceeding 1.5 million.” Total loan value = more than $224 billion. (Sources: The Times, First American CoreLogic). Thus, even if the recession ended tomorrow, the US will still have another 500k - one million foreclosures. And if the recession continues for another 6 months to a year, well, you do the math. (Hint: About 2 - 3 X as many) Excerpt: “In the latest phase of the nation’s real estate disaster, the locus of trouble has shifted from subprime loans — those extended to home buyers with troubled credit — to the far more numerous prime loans issued to those with decent financial histories. With many economists anticipating that the unemployment rate will rise into the double digits from its current 8.9 percent, foreclosures are expected to accelerate. That could exacerbate bank losses, adding pressure to the financial system and the broader economy. . . Economists refer to the current surge of foreclosures as the third wave, distinct from the initial spike when speculators gave up property because of plunging real estate prices, and the secondary shock, when borrowers’ introductory interest rates expired and were reset higher.” Note that these foreclosures are not the exotic no money down I/O ARMs from the early phase...

Minutes of Board discount rate meetings, April 6 and 27, 2009

NEW YORK (Reuters) - U.S. consumer confidence soared in May to its highest level in eight months, suggesting underlying improvement in the economy after a grim first quarter that witnessed a record plunge in home prices.

The home price slide accelerated during the first three months of 2009, according to a report issued Tuesday.

McLean, VA – Freddie Mac (NYSE: FRE) today announced the launch of its offering of Series K-003 Structured Pass-Through Certificates ("K Certificates"), multifamily mortgage-backed securities that provide a new vehicle for the company to provide liquidity, stability and affordability to nation’s multifamily housing market.

As job losses rise, growing numbers of American homeowners with once solid credit are falling behind on their mortgages, amplifying a wave of foreclosures.

The spring home-selling season is well underway, and this week we get the most complete evidence yet of how it's going, with a slew of housing-related data. By the end of the week, we should have a better sense of whether the story some economists are telling, that the housing bust is finally tap...

submits: The (source: the business insider) is not pretty. However, we disagree with negative tone of many market pundits on the increasing amount of American credit card debt.

In 2004, Tim Jones bought a little piece of the American dream: a modest three-bedroom home in Bend, Ore., that went for $218,000. Three years later he married and was ready for phase two of the dream: trading up. But instead of buying, he and wife Elise pocketed the $100,000 profit from the sale of their house and rented bigger digs.

More than 30 percent of consumers dropped below a 680 credit score after October 2008, increasing mortgage rates and creating greater challenges for lenders

Tools to help you stay in your home.

Tthe Federal Home Loan Banks (FHLBanks) are 12 regional cooperative banks that U.S.lending institutions use to finance housing and economic development in their communities. Created by Congress, the FHLBanks have been the largest source of funding for community lending for eight decades