September 2007 - MND NewsWire

The U.S. Census Bureau and the U.S. Department of Housing and Urban Development issued their monthly joint report on August new house sales on Thursday.

The July sales rate was itself revised downward from an original estimate of 870,000 units. The stunning figure, however, was the comparison of August 2007 data with that on sales one year earlier....

Frank Nothaft, Freddie Mac vice president and chief economist commented that, "Mortgage rates were largely unchanged in the previous week, with long-term rates lingering at lower levels not seen since May. The recent retreat in mortgage rates has brought in an increased volume of mortgage applications, according to the Mortgage Bankers Association, and pushed the share of applications for refinancing to the highest rate since April.

Probably no one who has read a paper or a website in the last 60 days expected anything different, but the monthly report from the National Association of Realtors (NAR) on Tuesday confirmed that once again the sales of existing homes fell in August.

Total existing home sales which include single family homes, town homes, condos, and co-ops...

It seemed to smack a bit of desperation at the time, but in hindsight it appears to look more like marketing genius.

Hovnanian Enterprises, Inc., one of the nation's largest homebuilders, threw open the doors of literally thousands of its newly built homes or those that were under construction last weekend and, in what media has described as a fire sale, offered deep discounts, sometimes in the six figure range, to buyers ready to make a deal.

Well, whatever it was, it apparently worked...

Housing starts in August hit the lowest level on an annualized basis since July 1995 The news would have been even worse if it were not for a substantial increase in activity in multi- family housing starts. Construction on projects with...

The Federal Reserve slashed benchmark interest rates by a half point in an agressive move to prevent the economy from moving into recession and to ease the pains of the housing bubble. The decision to cut the overnight federal funds rate from 5.25% to 4.75% was unanimous. This is the lowest level since May of 2006 and the first time the Fed has cut interest rates since June 2003. It was the first 1/2 point cut since November of 2002.

Lawrence Yun, senior economist for NAR said that unusual disruptions are dampening the outlook for home sales, notably for August and September. "There's been an unusual hit to home sales, starting in March when subprime problems emerged and more recently when problems spread to jumbo loans, with many potential buyers on the sidelines.

"However, the jumbo loan market is now beginning to settle, and..."

The Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ended September 7 showed a dramatic drop in the 30- year FRM, from 6.42 percent with 1.09 points (including the origination fee) to 6.25 percent with 1 point.

Mortgage application volume increased...