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  • Fri, Jun 25 2010
  • 7:21 PM » KB Home: "Month of May was particularly challenging" for housing industry
    Published Fri, Jun 25 2010 7:21 PM by Calculated Risk Blog
    On the conference call this morning, Jeffrey Mezger, president and chief executive officer of KB Home said the month of May was "particularly challenging" for the housing industry. Paraphrasing .. What KB Home saw in May - historically a strong month - was that home buyers stepped out of the market. Post tax credit traffic dropped like a rock in May. Not having any problem closing by June 30th. No need to extend tax credit closing date. Tax credit has added additional uncertainty to the mix. A lack of predictability in sales could impact profitability this year (CR translation: expect more losses). Q&A just started ... On the current quarter (ended May 31st) from MarketWatch:
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 10:01 AM » Mortgage Rates Set New Record at 4.69%, So Why Is Demand Weak?
    Published Fri, Jun 25 2010 10:01 AM by Google News
    Mortgage rates, at an average 4.69%, have fallen to their lowest levels in more than 50 years. So why is loan demand so weak?
  • 10:01 AM » The Homebuyers Credit: Is It Better to Laugh or Cry?
    Published Fri, Jun 25 2010 10:01 AM by
    For two years, the has been in the running for Washington’s worst tax policy idea. Now, new evidence about this bit of legislative bilge suggests it may be time to retire the trophy. The Commerce Department reports the new homes market collapsed in May after booming in March and April (chart). Well, in early spring, in response to an intense marketing campaign by the real estate and mortgage industries, tens of thousands of buyers accelerated home purchases to take advantage of this sweet tax give-away (as much as $8,000 for some buyers) before the credit expired on April 30. Then, just as most sentient economists predicted, the market dried up. Actually, it didn’t just dry up. It became the Death Valley of housing. Monthly new home sales (which are seasonally adjusted) had been running about 350,000 in early 2010. As buzz about the credit heated up, purchases spiked to about 390,000 in March and to 450,000 in April. Then, the credit disappeared and so did the buyers. Sales in Mayplunged to 300,000, the lowest level in four decades. As the chart shows, this was--entirely unsurprisingly--exactly the same pattern we saw when the credit was first scheduled to expire at the end of 2009: A big run up in sales in October and November followed by a sharp decline thereafter. Total amount of permanent job creation from this timing change: pretty close to zero. Cost to taxpayers: $12.6 billion just through last February—even before the latest buying frenzy. What a deal! As my Tax Policy Center colleague Ted Gayer has been , at least 85 percent of those buyers would likely have purchased a home anyway. For them, the credit was a pure gift--courtesy of a government running a $1.4 trillion deficit. But that’s not all. Yesterday, the Treasury Department’s inspector general issued its second And the scams are worthy of a Carl Hiasson novel. Among the lowlights: 1,295 prisoners received $9.1 million in credits for houses they claimed to buy while incarcerated. Two hundred forty-one...
    Click Here to Read the Full Article

  • 10:01 AM » Deregulate the Mortgage Market?
    Published Fri, Jun 25 2010 10:01 AM by Seeking Alpha
    Rortybomb submits: Nick Rowe writes It’s a good discussion, especially in the comments. For the bond nerds in the audience, Nick thinks they are stupid because they are callable (can be prepayed) which creates , which is dangerous with a fixed rate.
    Click Here to Read the Full Article

    Source: Seeking Alpha
  • 8:59 AM » Too Much Parking Leaves Cities Chasing Their Tails
    Published Fri, Jun 25 2010 8:59 AM by National Housing Conference
    We mentioned Tom Vanderbilt’s on the role of parking in smart growth in “” today, but I'd like to drive the point home. This is a classic case of an over-looked, out of date policy that puts a dent in our priorities for sustainability, economic development and public health – and has a simple fix. The policy is minimum parking requirements, or “municipal provisions that require developers building a new project -- whether commercial or residential -- to also construct a minimum number of new parking spaces, often without regard to the presence of nearby transit options or even actual need.” So developers are forced to make parking a lopsided priority. The “circular logic” of the parking minimums leads to “the space devoted to cars often exceeding the space devoted to humans.” Though parking minimums once made sense as a way to curb traffic, they now encourage unsustainable -- and often just plain bad -- behavior. Donald Shoup, author of , details the damage: “[Parking minimums] distort transportation choices toward cars, and thus increase traffic congestion, air pollution, and energy consumption. They reduce land values and tax revenues. They damage the economy and degrade the environment. They debase architecture and urban design. They burden enterprise and prevent the reuse of older buildings. And they increase the prices for everything except parking." The municipal parking priority often applies , with an unintended consequence that shouldn’t be that hazy to predict: more drunk driving. As , “there’s clearly something absurd about the idea of regulating bar-related land use so as to encourage and facilitate extra driving.” When it comes to urban planning, encouraging and facilitating driving in this way leads to more sprawl, less space for commercial or rental units, and more spending on housing and energy.
    Click Here to Read the Full Article

    Source: National Housing Conference
  • 8:59 AM » Jack Guttentag found that mortgage rates in the 1940s were in the low fours.
    Published Fri, Jun 25 2010 8:59 AM by
    Here is the . [update: of course these were typically 20 year loans, so the comparison is not perfect].
    Click Here to Read the Full Article

  • 8:59 AM » Analysts Question Fannie’s Threat on Mortgage Defaults
    Published Fri, Jun 25 2010 8:59 AM by NY Times
    Experts wondered what Fannie Mae, the mortgage finance giant, hoped to achieve by announcing it would punish owners who strategically defaulted.
  • 8:59 AM » Morgan Stanley to Settle Subprime Case
    Published Fri, Jun 25 2010 8:59 AM by NY Times
    The bank agreed to a $102 million settlement to end an investigation in Massachusetts into unfair lending practices.
  • 8:43 AM » Update: Unemployment Benefits, Housing Tax Credit
    Published Fri, Jun 25 2010 8:43 AM by Calculated Risk Blog
    From Lori Montgomery at the WaPo: The Senate on Thursday rejected a package of tax cuts, state aid and emergency jobless benefits ... [try again] after the July 4 recess. By then, more than 2 million people will have seen their unemployment benefits cut off, according to the U.S. Department of Labor. What this means is that anyone receiving extended unemployment benefits (there are several tiers) will not be eligible for the next tier when their unemployment benefits expire. This bill also contains the extension of the closing date for the homebuyer tax credit. As of right now, homebuyers must close by June 30th to receive the tax credit. But of course the housing industry wants even more. From Zach Fox at SNL Financial: Even though he is not in favor of another tax credit, [Michael Widner, an analyst with Stifel Nicolaus & Co.] said May's exceptionally low number means plenty of industry insiders will push for one. "On the one hand, I know that the phones are ringing off the hook in D.C. right now for people clamoring for a new tax credit," Widner said. "So the shock value of an all-time low is going to be a lot of people saying: 'Oh my God, we gotta do more to stimulate housing.' ... And on the other hand, you're going to get people, who frankly I side with more, saying: 'You know, look, obviously the tax credit did nothing but pull demand forward, and in the wake of the tax credit you see the void left behind.'" Hopefully there will not be another housing tax credit. And hopefully the change in eligibility date for extended unemployment benefits will be approved.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
  • 8:43 AM » Lennar: June Home Sales off 20% to 25% from 2009
    Published Fri, Jun 25 2010 8:43 AM by Calculated Risk Blog
    From Bloomberg: (ht Brian) Lennar Corp.’s home sales are down 20 percent to 25 percent this month compared with a year earlier ... Chief Executive Officer Stuart Miller said. “The entire market knew there’d be a slowdown as we came off the tax credit,” Miller said on a conference call with investors today. “It’s just that the reality of it doesn’t feel good.” In June 2009, new home sales were at a 396K seasonally adjusted annual rate. This is just one home builder, but a 20% to 25% decline would put sales in June at about the record low level of May. This is almost certain to the worst June sales rate since the Census Bureau started keeping records in 1963.
    Click Here to Read the Full Article

    Source: Calculated Risk Blog
    Published Fri, Jun 25 2010 8:43 AM by HUD
    WASHINGTON - During a keynote address to The Atlantic's inaugural Future of the City Forum in Washington, D.C., U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan today announced that HUD is launching a $100 million Sustainable Communities Regional Planning Grant program, the first of its kind designed to create stronger, more sustainable communities by connecting housing to jobs, fostering local innovation and building a clean energy economy.
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