July 2007 - MND NewsWire

The National Association of Home Builders sponsors an economic publication for the housing industry which publishes at HousingEconomics.com. In mid-July it released a study on Metropolitan Area House Prices and Affordability written by Elliot F. Eisenberg, Ph.D.

One cannot deny that the study is self-serving, but the findings are at least a little revealing of some of the reasons that housing prices, particularly of new houses, continue to climb in a tough market.

There was mixed news on the existing housing front in last month. The monthly survey by the National Association of Realtors (NAR) � showed the sales of existing homes, including single-family houses, townhouses, condos, and co-ops declined 3.8 percent off of the pace in May to a seasonally adjusted annual rate of 5.75 million units. This is a decline of 11.4 percent from annualized June 2006 sales of 6.49 million units.

"Home buyers have been getting mixed signals about the housing market, which is causing some of them to hesitate," Lawrence Yun, NAR senior economist, said. Two bright spots in the June report are...

...on Tuesday Countrywide reported a 33 percent drop in net income for the second quarter and announced that payments were delinquent on nearly 24 percent of its subprime mortgage loans compared to 15.33 percent at the same time in 2006. More disquieting, there is evidence that problems in the company's subprime sector appear to have spread to their higher rated prime loans, specifically home equity products on which 4.56 percent of customers were behind in payments compared to 1.77 percent during the same period last year.

Another lender is still alive but retrenching. Indymac Bank announced late last week that...

The homebuilding industry is obviously in distress. But, in testimony before the House Financial Services Committee, Federal Reserve Chairman Ben Bernanke made an interesting statement about employment in the home- building industry. Remarking that there was a bit of a "puzzle" about government unemployment reports which...

An otherwise very smart real estate attorney once said to a friend "Nobody understands dual agency." It seemed like a weird thing for a lawyer to say at the time but Newsweek has just proven his point.

In a rather remarkable short piece promoting buyer agency in the "Tip Sheet" portion of the July 15 edition, the magazine made the following points...

We mentioned briefly last week that the National Association for the Advancement of Colored People (the NAACP) has filed a class action suit against more than a dozen subprime lenders in an effort to stop those lenders from engaging in what the suit calls "systematic, institutionalized racism in making home mortgage loans."

The NAACP suit specifically names 14 lenders: Ameriquest, Wells Fargo...

According to the Freddie Mac Primary Mortgage Market Survey for the previous week, long term interest rates were down for the third week in a row. However, the Weekly Mortgage Market Survey released by the Mortgage Bankers Association reported quite the opposite results with rates up sharply from a week earlier.

"Long-term mortgage rates continued to move lower for a third consecutive week, in part reflecting a moderation in core inflation," said Frank Nothaft, Freddie Mac vice president and chief economist. "In the statement accompanying their decision to leave the target federal funds rate unchanged, the Fed noted that..."

The Mortgage Bankers Association released the results of two surveys covering the mortgage world in the second half of 2006 on Tuesday.

84 lenders participated in the Mortgage Originations Survey, including almost all of the top 30 mortgage originators. During the survey period these respondents originated $681 billion in first mortgages and $163 billion in second mortgages.

The survey found that...