Fed Minutes analysis
Fed Minutes analysis
The U.S. housing sector got another dose of sobering news Tuesday, as home prices in 20 major cities fell a worse-than-expected 1.3% in October from September. The S&P Case-Shiller index has now dropped for four straight months.
Although new home sales rose 5.5% in November to a 290,000-unit annual rate, it%u2019s important for investors to maintain a sense of perspective about the rise. The gain was less than expected, and home sales are still well below the sales level typically seen in a healthy housing market.
Sales of new homes increase in November after hitting second-lowest point on record in October.
U.S. mortgage rates have grown for five straight weeks, in the last week hitting their highest levels in seven months.
In some parts of the U.S., the real estate market remains deep in recession. But even with housing prices sitting at multi-year lows, millions of houses remain empty, unable to attract buyers haunted by unemployment and a weak economy. As part of a new series, Ghost Towns of the Great Recession, DailyFinance takes a look at one town near New York City that is still struggling with the effects of the great real estate bust.
Housing market watchers got a bit of good news Thursday: Sales agreements for previously occupied homes rose 10.4 % in October. But that was one spark of hope against a backdrop of declining prices, bulging inventories and ongoing legal issues around foreclosures. A real estate recovery in 2011? Don't count on it.
Aided by an improving job market and comparatively low mortgage rates, U.S. pending home sales surged a record 10.4% in October. Still, despite the good news, the latest new and existing home sales reports suggest a sluggish, uneven U.S. housing sector recovery, at least into early 2011.
Sales of foreclosed homes plunged 25% in the last quarter, which ended in September, from the previous quarter -- and 31% from the year-ago period.
U.S. home prices in 20 major cities fell a worse-than-expected 0.7% in September, Case-Shiller said, as home-buyer demand ebbed with the approaching September 30 closing deadline for the home buyer tax credit. Further, low demand from buyers suggests continued home price weakness heading into 2011 until the large inventory of unsold homes is reduced.
For years, the property management business has been stuck in the Dark Ages -- using faxes, paper ledgers and out-of-date spreadsheet software. But as the foreclosure crisis adds millions of people to the rental market, new startup RentJuice is aiming to bring property management into the Internet Age.
Michael and Dolores Kirkbride of North Carolina settled their debt with Countrywide, but the bank and later its new owner, Bank of America, kept calling to demand payment -- hundreds of times. A judge has fined BofA for its egregious conduct.
A smaller percentage of mortgage holders were delinquent on their payments in the third quarter than in the second quarter, although the percentage of delinquencies remains up from the same period last year.
U.S. housing starts unexpectedly plunged 11.7% in October to a 519,000-unit annual rate, weighed down by a 47.5% decline in apartment and condo construction. But building permits, a leading indicator of future housing construction, did inch 0.5% higher last month. U.S. housing starts unexpectedly plunged 11.7% in October to a 519,000-unit annual rate, weighed down by a 47.5% decline in apartment and condo construction. But building permits, a leading indicator of future housing construction, did inch 0.5% higher last month.
Applications for mortgages dropped last week, as demand for refinancing loans fell. The Market Composite Index, which measures total applications for mortgage loans, slipped 14.4% from a week earlier, on a seasonally adjusted basis. The figure does not include an adjustment for Veterans Day.
In a Senate panel hearing Monday, the Iowa attorney general said the problems in the home-loan industry extend well beyond just "robo-signing." A system-wide overhaul is needed, he said.
Flawed foreclosure paperwork could inflict huge losses on the nation%u2019s top banks and spread chaos through the housing market, according to a congressional report. Accusations that major mortgage lenders including Bank of America Corp. (BAC), used flawed or even forged documents to foreclose on homes have worried officials in state and federal governments.
With mortgage refinancing applications up and house prices on the rise recently, you may think the worst is behind us. But nothing could be further from the truth.
Demand for mortgage loans rose last week, driven by low interest rates. The Mortgage Bankers Association said its Market Composite Index rose 5.8% on a seasonally adjusted basis from a week earlier. The index measures the volume of applications for loans.
The world economy is poised for more of the same in 2011 -- booming growth in China, India and Brazil, and a sluggish crawl in the U.S. and much of the rest of the developed world. Here are the five most important factors driving expectations for sluggish economic growth in the U.S.:
Bond insurer Ambac Financial Group has filed for Chapter 11 bankruptcy after failing to raise more capital.
Pending home sales in the U.S. unexpectedly fell 1.8% in September, the National Association of Realtors reported Friday. It was the statistic's first decline in three months, and one that suggests that the housing sector's recovery is likely to remain uneven through at least early 2011.
Mortgage giant Freddie Mac posted a net loss of $4.1 billion for the third quarter, compared with a loss of $6 billion a year earlier. The company paid a $1.6 billion dividend to the Treasury, which rescued the ailing company two years ago. Freddie Mac also set aside $3.7 billion to cover credit losses and posted derivative losses of $1.1 billion, the company said in a statement.
About three out of four Americans say the U.S. is still in a recession, with Republicans and women slightly more pessimistic about the U.S. economy than Democrats and men, according to a recent AOL survey.
U.S. new home sales rose a better-than-expected 6.6% in September, but the rise is hardly cause for celebration. Sales remain near a 47-year low, with the sector showing few signs of generating enough demand to vault sales back to normal levels.
Among the day's top online stories for investors: why the housing market is ready to boom, which sector significantly outperformed the S&P over the past year, and the scoop on Warren Buffett's successor Todd Combs.
According to Case-Shiller data, home prices in the U.S. fell from July to August as the impact of the federal home buyer tax credit program waned. Prices rose on a year-over-year basis, but less than expected.
The rescue of mortgage giants Fannie Mae and Freddie Mac could cost as much as $363 billion over the next three years -- more than double the amount spent so far -- the Federal Housing Finance Agency announced Thursday.
An Obama Administration housing official said mortgage lenders such as Bank of America Corp. and JPMorgan Chase & Co. could legally resume foreclosures on homes, while a New York judge is forcing lawyers handling foreclosures to verify paperwork accuracy, the Associated Press reported.
The Fed's latest Beige Book report confirms what earlier economic data has indicated. Eight of the 12 regional Fed banks, including San Francisco and Chicago, reported some form of growth in the September/October period. But nothing to write home about.