Voice of Housing

Voice of HousingThe Voice of Housing Bloghttp://www.mortgagenewsdaily.com/channels/voiceofhousing/atom.aspxCommunity Server2012-09-24T17:35:00ZSequester or Not Housing Recovery to Bode Well for Employment/channels/voiceofhousing/03052013-adp-employment-report.aspx2013-03-06T00:42:00Z2013-03-06T00:42:00Z<p>The Budget Control Act's automatic spending cuts, allowed to roll into effect by Congress last week, risk stalling the relatively positive trends in the employment market. However, the full impacts of the sequester will not be fully understood for at least several months. On the positive side, recent gains in home values and new home construction are strong proxies for continued strength in the job market.</p> <p><i>T</i>he unemployment rate typically follows housing expectations and trends. Unemployment is correlated to home prices and housing starts and high unemployment is commonly associated downturns in these indicators. The relationship between housing and employment can be somewhat of a chicken and the egg enigma - housing will recover when the job market recovers, but the job market cannot recover without a rebound in housing. But, given the stubbornly high unemployment figures and the improving housing market it appears that in this recovery, housing has rebounded <a name="_GoBack"></a>first and will do its fair share to bring improvements to the job market.</p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/03052013-adp-employment-report.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/298752/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=298752" width="1" height="1">timroodhttp://www.mortgagenewsdaily.com/members/timrood/default.aspxA Housing Riddle: Why did the Homeowner Stop Making their Mortgage Payments?/channels/voiceofhousing/02282013-fha-policy.aspx2013-03-01T16:13:00Z2013-03-01T16:13:00Z<p>    </p> <p class="MsoNormal"><span>We are no longer facing a housing market riddled with exotic subprime products with increasing <a href="/mortgage_rates/">interest rates</a> and payments.  Instead the <b>greatest challenge facing</b> these remaining low- to moderate-income homeowners, especially those with loans backed by FHA who never offered such products, is economic circumstances that either prevent them from becoming homeowners or trigger their default. Today’s defaults are symptoms of other macro economic policies and not necessarily the result of bad lending policy at the FHA...<o:p></o:p></span></p> <p><span></span><i><span><o:p></o:p></span></i></p> ...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/02282013-fha-policy.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/298102/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=298102" width="1" height="1">timroodhttp://www.mortgagenewsdaily.com/members/timrood/default.aspxUnderwriting Standards Likely to Tighten and Negatively Impact Housing Indicators/channels/voiceofhousing/01152013-housing-market-index.aspx2013-01-15T19:32:00Z2013-01-15T19:32:00Z<p> </p> <p><i><span><o:p></o:p></span></i></p> <p><span>The <b>Housing Market Index (HMI)</b> is a monthly survey of 300 homebuilders to gauge demand for new home construction, and their corresponding confidence. New home construction has historically contributed roughly five percent to gross domestic product (GDP) and is therefore a strong proxy for economic growth.<o:p></o:p></span></p> <p class="MsoNormalCxSpMiddle"><span>Notwithstanding the impacts of sequestration, or the collateral damage resulting from a default by the United States on its financial obligations - favorable demographics trends, compelling affordability rates, and depressed inventory levels of both existing and new homes <b>bode well</b> for continued overall strength in builder confidence...</span><span><o:p></o:p></span></p>  <p> </p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/01152013-housing-market-index.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/291485/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=291485" width="1" height="1">timroodhttp://www.mortgagenewsdaily.com/members/timrood/default.aspxWhat do Changes in GDP Mean for the Housing Market Recovery?/channels/voiceofhousing/12202012-gdp-home-prices.aspx2012-12-20T14:16:00Z2012-12-20T14:16:00Z<p>This week the Commerce Department will release gross domestic product (GDP) data for the end of 2012. Given the sustained uncertainty around the fiscal cliff, and recent projections from the Federal Reserve, GDP is likely to maintain current levels or see very minimal growth. But looking past the immediate upcoming winter months, increasing home sales, housing permits, and new construction will likely lead to improvements in GDP.<br /><br />Even with just a dozen days left until the “fiscal cliff,” President Obama and House Speaker Boehner have still not agreed to the terms of the budget deal. Negotiations over the debt ceiling, tax rates for households with an annual income in excess of $1 million and entitlement spending cuts remain tense. While the fiscal cliff is certainly something our lawmakers should treat with all necessary seriousness, it is likely that the damages that the negotiations will have on the economy have already been done.</p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/12202012-gdp-home-prices.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/288485/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=288485" width="1" height="1">timroodhttp://www.mortgagenewsdaily.com/members/timrood/default.aspxFinancing Trends for Government Contractors/channels/voiceofhousing/11282012-government-contractor-loans.aspx2012-11-29T01:49:00Z2012-11-29T01:49:00Z<p>It is no secret that commercial banks are less likely to provide credit to small and medium-sized businesses than in the past, and <b>government contractors</b> are certainly not immune to this trend.<br /><br />For those companies in need of working capital and lacking a traditional commercial banking option, the specialty finance market may be the best option.<br /><br />The good news is that there is an abundance of finance companies providing alternative lending options for government contractors and other businesses. In fact, 76% of the members of the Commercial Finance Association are non-bank financial institutions. And, according to a recent article, noted hedge fund manager Daniel Zwirn is forming a fund to “occupy the competitive space evacuated by traditional lenders.”</p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/11282012-government-contractor-loans.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/284767/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=284767" width="1" height="1">bmontgomeryhttp://www.mortgagenewsdaily.com/members/bmontgomery/default.aspxExpect Weakened Confidence in the Winter Months/channels/voiceofhousing/11272012-consumer-confidence-index.aspx2012-11-27T15:00:00Z2012-11-27T15:00:00Z<p>Leading up to the November election, expectations for the future likely reflected optimism, or at least wishful thinking, but with widespread media coverage of the impending fiscal cliff debate and the status quo election results, consumers are likely to be left feeling economically fatigued and anxious. This shift in sentiment is surely going to manifest itself in weaker Consumer Confidence Index numbers.<br /><br />On Tuesday, November 27, 2012, The Conference Board will release the Consumer Confidence Index (CCI) for November. This lagging indicator would generally be considered an effective proxy for consumer demand in the months to come. However, during unpredictable and unstable times these sorts of sentiment-based studies and indexes have not correlated tightly to consumer demand...</p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/11272012-consumer-confidence-index.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/284451/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=284451" width="1" height="1">timroodhttp://www.mortgagenewsdaily.com/members/timrood/default.aspxDemographics Cannot be Destiny/channels/voiceofhousing/11162012-election.aspx2012-11-16T18:44:00Z2012-11-16T18:44:00Z<p>The interpretation of the results of the November 6th’s election, from triumphant victors to over-analyzing pundits, appears to suggest that the fate of the United States going forward will be determined by one factor – the <b>hurtling demographic train</b>.<br /><br />Pundits, analysts and politicos assert that the U.S. is on a linear trajectory where rapid growing minority populations will overtake the nation’s traditional white majority whose beliefs will be atrophied and continue to display voting patterns observed in the recent past. This assertion creates an inevitability of political outcomes with the nation drifting leftward, uninterrupted by the influence of ideas and intellectual discourse.<br /><br />The modern belief that progress is based on the pursuit of education and knowledge, and the subsequent evolution of beliefs has shaped the choices people have made including the political ones.<br /><br />Are we at a point where we are going to write off all the minority groups as having formed their own beliefs purely derived from their ethnic or racial identities, and never subject to change? Do we expect that future politics will only be determined by the minority population numbers relative to the white population? Will minority communities with pre-formed, identity-based beliefs follow issues and take sides to conform to those beliefs?<br /><br />As a member of one of those minority communities, I am <b>offended by assumptions based on such low expectations</b>. But unfortunately the reality I observe in my own community appears to reinforce the paradigm...</p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/11162012-election.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/283469/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=283469" width="1" height="1">ManojSinghhttp://www.mortgagenewsdaily.com/members/ManojSingh/default.aspxFormer FHA Commissioner: Shortfall Pales in Comparison to the Economic Value it Provides/channels/voiceofhousing/11152012-fha-budget-shortfall.aspx2012-11-16T12:43:00Z2012-11-16T12:43:00Z<p>Here is the $64,000 question (or $1 trillion in FHA’s world) <b>what happens after the fiscal year 2012 actuarial review is released</b> to the public?<br /><br />In reality, we may not know the true state of FHA's fiscal health for several more months.<br /><br />For one, the federal budget process drives everything related to the fiscal health of FHA and <b>not the results of the annual actuarial review</b> although it is used to help make policy decisions, which are then incorporated into the annual budget process. As we learned today the FHA capital reserves continued its four-year decline but now what?...</p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/11152012-fha-budget-shortfall.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/283372/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=283372" width="1" height="1">bmontgomeryhttp://www.mortgagenewsdaily.com/members/bmontgomery/default.aspxNow What? - A Post-Election Analysis of Potential Housing Reform/channels/voiceofhousing/11072012-presidential-election.aspx2012-11-07T19:52:41Z2012-11-07T19:52:41Z<p>We are all hopeful about the opportunity to begin to <b>move past the politics</b>, and towards having bipartisan support for <b>comprehensive housing reform</b> that will do more than simply add to the regulatory burden on the industry. Instead, we will need to leverage the existing competencies of the government-sponsored enterprises (GSEs) and mortgage industry more broadly to drive a manageable and transparent partnership between private enterprise and federal supervision.<br /><br />The urgency around housing reform has been mitigated by the strong economic performance of the GSEs in the past two quarters, relatively strong home price appreciation, and a mortgage industry enjoying the best profit margins ever. However, our housing recovery is still young and tenuous and is a reflection of a fragile macroeconomic recovery in the United States...</p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/11072012-presidential-election.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/282191/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=282191" width="1" height="1">timroodhttp://www.mortgagenewsdaily.com/members/timrood/default.aspxEconomic Development Shouldn’t Require a Natural Disaster/channels/voiceofhousing/11012012-employment-situation-report.aspx2012-11-01T08:56:00Z2012-11-01T08:56:00Z<p> Last month the unemployment rate dipped below the eight percent mark for the first in 2012 - much to the delight of media pundits and President Obama's Administration.  We can all agree that the most important fix for our economy is more jobs and that meaningful declines in the unemployment rate are comforting proxies. However, the unemployment rate can be misleading when viewed in the abstract. A closer look at the employment report paints a very different picture and begs the questions - how bad do things need to get before economic development becomes a priority in this country?</p> <p>The headline figures from last month's September Employment Situation Report were a 0.3 percent drop in unemployment and a 7.8 percent unemployment rate; I would offer a different set of numbers that paint a dissimilar picture...<a name="_GoBack"></a></p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/11012012-employment-situation-report.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/281343/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=281343" width="1" height="1">timroodhttp://www.mortgagenewsdaily.com/members/timrood/default.aspxConsumer Confidence: Stop Talking About the "Undecided Voter" and Start Talking About The "Disenchanted Consumer"/channels/voiceofhousing/10292012-consumer-confidence-index.aspx2012-10-29T19:54:00Z2012-10-29T19:54:00Z<p><i>Last month's Consumer Confidence Index showed general improvements and reported that optimists now again outnumber pessimists on income expectations. But although the index shows relative good news, when you put the increases and strong forecasts for October's index at 74 into perspective, this number is still lower than the lowest point in the 2001 recession.</i></p> <p><i>So if the index isn't showing levels historically associated with recovery and economic improvement, what's the story? It has nothing to do with the undecided voter, and has everything to do with the disenchanted consumer. Consumer disillusionment with the future of our economy was illustrated by some of the figures in last month's release.</i> </p> <p><i>In September, the number of individuals claiming business conditions were "good" grew slightly from 15.3 percent to 15.5 percent, and individuals claiming conditions were "bad" fell from 34.3 percent to 33.3 percent.  Given those figures, 51.2 percent of those surveyed felt that the economy was neither improving nor deteriorating. </i></p> <p><i>In September, 8.3 percent of individuals surveyed described the job market as "plentiful," up from August's 7.2 percent.  Individuals claiming that jobs were still "hard to get" fell from 40.6 percent to 39.9 percent. On the assessment of the future of the jobs market, again, over half of the individuals surveyed, 51.8 percent, saw the employment situation as stagnant to weak.</i></p> <p>This week, on October 30, 2012, the Conference Board will release the Consumer Confidence Index for October. The index wavered back and forth over the summer and into the fall, with declines in August and improvements in September to 70.3.  September's index represented a seven percent increase.</p> <p>Notwithstanding these improvements, the index doesn't show normal recovery levels, especially considering that the recession technically ended over two years ago.  Today's "good days" with the Consumer Confidence Index are still at par with or even below the index levels <i>during </i>the 1990 and 2001 recessions of 71.5 and 109.3 respectively. Even the 1980 recession level was 69.8, compared to the low 70s we're seeing today.</p> <p>These low levels are, in part, explained by the extreme drop in the index during the recession to the lowest levels seen in three decades at 54. But that doesn't explain why consumer confidence hasn't rebounded.</p> <p>Uncertainty due to the presidential election around the future political agenda and president is likely contributing somewhat to lower confidence levels. Employment levels lingering persistantly above eight percent up until last month and tattered household balance sheets are also contributing to uncertainty.</p> <p>Ultimately, consumer disenchantment seems to be the biggest problem, as illustrated by some of the figures in last month's release. On the assessment of the future of the jobs market and business conditions over half of the individuals surveyed saw sustained economic conditions.</p> <p>These disillusioned consumers are shrugging their shoulders and saying "eh" to the economy today as I see it.  Over half of our consumers are in this "eh" camp when it comes to the future of our economy. This attitude is manifested in the low consumer confidence levels, which are certainly improving relative to the 2008 levels, but are still remarkably pessimistic.</p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/10292012-consumer-confidence-index.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/280994/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=280994" width="1" height="1">timroodhttp://www.mortgagenewsdaily.com/members/timrood/default.aspxHome Prices and What to Expect from the Upcoming Winter Months/channels/voiceofhousing/10232012-home-prices.aspx2012-10-23T22:30:00Z2012-10-23T22:30:00Z<p>Home prices appear to be the silver lining of the housing market today, as one of the main indicators showing consistent signs of improvement and recovery. Most reputable indices show that home prices have bottomed and are now rising.  Because most consumers view the recovering housing market as a major proxy for the health of the economy any meaningful or sustained decrease in those indices will have a damaging impact on consumer confidence. And given the seasonality of the housing market today, we could be in store for less optimistic home prices in the winter months.<br /><br />On Wednesday, October 24, the Federal Housing Finance Agency (FHFA) will release the Monthly Home Price Index for August 2012. In the last month reported, home prices rose very slightly by 0.2 percent from June to July. The S&P/Case-ShillerHome Price Index also reported small gains for the same month.<br /><br />While it looks like the home prices are generally trending upward now, the seasonality of the housing market does raise concern for the upcoming winter months, where it is likely that the slow buying season will manifest itself in home prices.<br /><br />Last year, in the winter of 2011, we saw the same thing.  Home prices dipped down in the forth quarter and dragged consumer confidence down with it.  The two measures didn’t begin to improve until the spring buying period began.  <br /><br />If the same pattern is repeated this year, I would predict that consumer confidence would again be pulled down by lower home prices.  Home prices are very visible to consumers – to underwater homeowners, to homeowners looking to sell their property, and to potential homebuyers. And if these consumers see weak home prices, rental rates are likely to remain high, while residential housing indicators see a reversal of the gains made earlier in the year.</p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/10232012-home-prices.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/280269/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=280269" width="1" height="1">timroodhttp://www.mortgagenewsdaily.com/members/timrood/default.aspxUnderstanding the Causal Relationships Driving Housing Indicators/channels/voiceofhousing/10172012-new-residential-construction.aspx2012-10-17T13:15:00Z2012-10-17T13:15:00Z<p>Existing home sales, median home price data and new residential construction data will be released later this week. To understand and predict these reports you really need to understand the causal relationships with other data sources (listed below). For example, demand for housing starts with demand for shelter, which is largely driven by household formation rates. The Affordability Index juxtaposes the relative affordability of buying a home verses renting a home. Home sales rates and the trajectory of median home prices illustrate where we are in a cycle - recovering, stabilizing, declining. Consumer Confidence and Capacity (employment/unemployment rates) create the emotional currency that most effects a buy/rent decision. Given the trends in the underlying data, we predict the modest, positive trend to continue for existing home sales, home prices and new residential construction this week.<br /><br /><b>Demand for shelter:</b><br /><br />Household formation rate – doubled in 2011, and increasing overall, but continues to slip in the 18-34 year-old cohort (prospective first time homeowner pool). Overall positive for housing demand but not overwhelmingly. <br /><br /><b>Options - buy or rent?:</b><br /><br />Affordability rate – record high making the economic argument for buying vs renting. <br /><b><br />Buy now or later?:</b><br /><br />Existing home and new home sales rate up 10 percent year-over-year. Demand is high and increasing.<br /><br />Median home prices – every reputable index has bottomed and median home values are up five percent year-over-year. Value trends are up and are likely to continue up creating urgency to buy sooner than later.<br /><br />Mortgage rates – lowest in history but in a precarious place given the fiscal cliff and deficit spending. More likely to go up then down which creates urgency to lock in. <br /><br /><b>Supply:</b><br /><br />Existing home inventory – down 20 percent year-over-year and at six months supply which is back to normal for a healthy market.<br /><br />New home inventory – down to 144,000 units or 4.5 months supply, which is a historic low.<br /><b><br />Confidence & Capacity to Pay:</b><br /><br />Unemployment rate down to below eight percent for the first time in four years. New jobs being created slightly above the rate of new entrants to the workforce. Overall a neutral to slightly positive for the housing market.<br /><br />Consumer confidence rate – is up but remains near 20-year lows. Overall a neutral to slightly positive for the housing market.<br /><br />Consumer spending – up modestly in the last six months and shows consumers feeling wealthier. Slight positive for housing.<br /><br />The results of the New Residential Construction data, scheduled to be released on Wednesday, will likely be explained by Friday’s numbers in the Existing Home Sales and Median Price report.<br /><br />Existing home sales and median existing-home prices have been bellwethers for the housing recovery.  In September, the National Association of Realtors reported a remarkable six-month increase in home sale prices, and a nearly 10 percent year-over-year increase.  Existing home sales also climbed 7.8 percent from July to August, representing a 9.3 percent year-over-year increase.<br /><br />Unfortunately, the gains seen by existing home sales and median home prices have come at the expense of new residential construction. New home inventory remains at a historical low of 4.5 months of supply. Housing starts saw some declines and minimal increases over the summer of this year.  Moreover, new construction today remains dismal compared to historical levels.<br /><br />New residential construction remains at levels half of historical norms, in terms of its contribution to GDP. And, while existing sales are clearly bouncing back, new home sales continue at a lackluster pace. As context, consider that it has taken nearly six years to clear a mere 430,00 in new housing inventory.<br /><br />The housing market, especially this new home construction, can’t recover fully until the job market rebounds. What is not clear is the sequencing of the causal relationship between housing and employment and other factors. It's the chicken and egg scenario – the job market will recover when the housing market recovers, but the housing market (specifically new home construction) can’t recover until the job market improves. Given the trends we’ve observed, we expect slower, modest, but positive movement in the two reports to be released this week.</p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/10172012-new-residential-construction.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/279494/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=279494" width="1" height="1">timroodhttp://www.mortgagenewsdaily.com/members/timrood/default.aspxConsumers Still Keeping Us Out of the Red/channels/voiceofhousing/10042012-employment-situation-report.aspx2012-10-04T18:35:00Z2012-10-04T18:35:00Z<p><b>Summary</b><br /><br />When using GDP components as our proxies for patterns and predictions in the employment market it is hard to find reasons to be optimistic about the upcoming September Employment Situation Report. For example:</p> <ul> <li>Real federal government consumption expenditures and gross investment – flat to negative;</li> <li>Real personal consumption expenditures has been low and trending down generally;</li> <li>Home construction is up, but still barely has a pulse;</li> <li>Private businesses increased inventories are up;</li> <li>Exports have been surprisingly robust in 2012, but the headwinds are blowing harder every day given the European recession and the slowing Chinese economy.</li> </ul> <p>Given that the United States is a consumer-based economy, what does this data tell us about the consumer. Consumer behavior drives many of the industries our economy depends on, especially the housing market, and the economic data is showing that consumers are still uncertain about the recovery. It appears the consumer is keeping us out of the red from a GDP perspective but they are doing so despite troubling economic times for the middle and lower classes and not because of optimism of wealth. The question is but for how long…<br /><br /><br />On Friday, October 5, the Bureau of Labor Statistics will release the Employment Situation Report for September. The report will likely reinforce the notion that the economy is loosing steam, or at least still low on steam.<br /><br />The ADP National Employment Report showed a decrease in the number of new jobs added in September compared to August.  In August the private sector added 201,000 jobs, and in September it only added 162,000 jobs.  Prior month increases in July and August were also revised downward.  Job increases in the critical manufacturing and construction industries remained low at 4,000 and 10,000 respectively. <br /><br />Construction industry employment reflects the industry’s confidence in the future of the housing market and represents a drop in the bucket compared to the one million jobs the industry needs to add to reach healthy levels. Even though construction jobs are up nearly 20 percent year-over-year, they are down almost 75 percent from 2005 peaks. <br /><br />Retail sales gains are also only expected to see mild increases in September of less than two percent. While some may argue that any increase is good news, a one to two percent increase pales in comparison to pre-crisis levels and even recent levels.  In September 2011, retail sales rose over five percent, and in August 2012, retail sales rose over six percent.<br /><br />Jobless claims are also up. For the last week of September, weekly unemployment claims rose. Seasonally adjusted initial claims rose by 4,000 from the prior week.<br /><br />All of these issues contribute to additional consumer anxiety and our consumption-based economy requires people to spend in order maintain economic growth while keeping up with population expansion and financial obligations.  And in addition to these reports the rhetoric around the jobs market remains tense with political dysfunction, the fiscal cliff debate, an impending expiration of the Bush tax cuts, and the continued recession.  The economy still offers a disappointing big picture and consumers appear to be acting accordingly.</p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/10042012-employment-situation-report.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/278040/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=278040" width="1" height="1">timroodhttp://www.mortgagenewsdaily.com/members/timrood/default.aspxPreviewing Monthly Home Price Index and New Residential Sales/channels/voiceofhousing/09242012-residential-sales-construction.aspx2012-09-24T16:35:00Z2012-09-24T16:35:00Z<p>Last week both <strong>residential construction and existing home sales</strong> were up modestly.<br /><br />Median home prices and the number of homes sold are both up nearly 10 percent year over year. However, these indexes are improving despite the lackluster demand of traditional owner-occupied housing that has served as the backbone of the U.S. housing market. This traditional demand, or lack of demand, is a byproduct of confidence. A consumer's confidence in their job and job prospects, their confidence in the housing market, and their confidence in the country are what compel them to buy instead of rent a home.<br /><br />The persistently high unemployment rate at or above eight percent, a drop in household net worth greater than 30 percent during the financial crisis, a decline in real wages, and political uncertainty surrounding the upcoming presidential election all conspire to create anxiety not confidence.<br /><br />And to put it simply - <strong>anxious people don't buy houses</strong>; confident people buy houses. <br /><br />This explains the 15.5 percent decline in owner-occupied purchases in 2011, and the corresponding seven percent increase in investment and vacation home sales. In August, first-time buyers only accounted for 31 percent of purchases, down from July by three percent, and down one percent year-over year.<br /><br />All-cash sales also remain high.  All-cash sales made up 27 percent of home sales in August.  Investor sales made up 18 percent of the market, also up from July by two percent.<br /><br />These housing market dynamics and market shares will need change to sustain a long-term housing recovery and stability, and traditional demand for owner-occupied and first-time home purchases for the average American family will require strong consumer confidence.  Given the current state of the economy and American politics, this restoration will take time.</p>...(<a href="http://www.mortgagenewsdaily.com/channels/voiceofhousing/09242012-residential-sales-construction.aspx">read more</a>)<p><div style="background-color:#D4EDC9;border:1px solid #BDD4B3;padding:3px 5px 3px 6px; color:#000000;font-family:arial,sans-serif;font-size:12px;"><strong>Forward this article via email:</strong>  <a href="http://www.mortgagenewsdaily.com/channels/275798/3/forward.aspx" style="color:#3333CC;">Send a copy of this story</a> to someone you know that may want to read it.</div></p><img src="http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=275798" width="1" height="1">timroodhttp://www.mortgagenewsdaily.com/members/timrood/default.aspx