What Now?
It’s an important question, since it appears the homebuyers tax credits won’t be extended. But it’s a question not to be feared. We think it’s time the housing market stood on its own feet anyway. After all, we can’t gauge the health of a market if it’s still supported with taxpayer stanchions.
But that’s okay; we think the housing and mortgage markets are sufficiently healthy to stand alone. Pessimism is the intellectual position, but the fact is the economy is getting better: Despite worries that American consumers might hunker down for years — spooked by debt, lost savings, and unemployment — austerity has given way to shadows of a new shopping spree: households are replacing cars, upgrading home furnishings, and amassing gadgets. What’s more, wealth – at least wealth measured by equity holdings – is booming.
On the mortgage side, private investors are returning. A California firm recently completed the first private-sector sale of a security backed by mortgages in nearly two years, potentially reopening a market slammed shut by the housing crisis. The $238-million deal was of the highest quality, to be sure, with borrowers making an average down payment of 45 percent and mortgage payments comprising less than 30 percent of income. But as the economy continues to improve and investors become less risk adverse, less restrictive mortgages will be securitized.
Bottom line: we see a growing economy, improving employment, stable home prices, and less restrictive (though higher rate) mortgages in our future. In other words, we see a market for buying and refinancing today.
Is Housing Still the Leader?
That appears to be the case, at least according to data released from the Census Bureau. Going back to 1968, the trend in housing starts has portended the trend in the overall economy. Should we be optimistic or pessimistic? That’s difficult to say. Monthly figures on starts are volatile, and housing starts fluctuate more than many indicators. It takes several months for total housing starts to establish a trend. The good news is that going back to October, the trend in starts has been mostly stable and up. The bad news is that January’s free-fall in new-home sales could pressure the trend to change direction. Or maybe not. The problem in vetting the data is that no two periods are exactly alike and history never repeats itself perfectly. For example, Census Bureau data show that housing completions generally lag housing starts, as would be expected, except in the latter half of 2009, where starts have fallen off a cliff compared to completions, creating a wide, unprecedented divergence. So what does it all mean? Economists who believe that housing is the leading economic indicator aren’t very bullish on the economic outlook. We tend to be a little more bullish, because it can be misleading to read too much into historical correlations of two variables – in this case, housing and the economy. What’s more, the more correlations are vetted and become known, the more their predictive value tends to break down.
DeanRizzi
http://www.drlending.com/
Positives of This Economy!!!
JEvery Negative Has a PositiveJ
Positives of This Economy
1. Bay Area Housing Affordability has gone from 16% to 38%
2. Debt of Americans is Decreasing.
3. A Large Increase in People Volunteering.
4. A Large increase in Military Enrollment.
5. First Time Home Buyers can get an $8000 Tax Credit.
6. Buyers of California New Homes can get a $10,000 State Tax Credit.
7. People are able to modify or refinance their loans to an affordable payment.
8. Businesses have the opportunity to clean up their books and start fresh.
9. Great Opportunity to Purchase a new car or any other major purchase.
10. Tax on Debt Forgiveness is waived.
And one of my favorites; you can Buy any Foot Long Sub for only $5.00
Please add to this list of Positives
www.leesellsmore.com
Housing Stimulus – An Open Letter to the Politicians
To Congress Woman Jackie Spier, Senator Diane Feinstein, and Senator Boxer
I am a local realtor specializing in San Mateo and San Francisco Counties. I do not think the $15,000 Home Buyer Tax Credit in the Economic Stimulus Package is making best use of Tax Payers money. Read more
Housing Stimulus Package! I don’t think so!!!
Credit/Loan Does it Stimulate the Housing Market? I don’t think so!!!
AS promised in my last blog I have continued my thoughts on the most recent Housing Stimulus Package. I will continue in next week’s blog.
Part of the recent Housing Stimulus package is a much publicized First Time Home Buyer Credit! It is not a credit. It is 15 year Interest FREE loan. Gotta take anything For Free. This applies to any home purchased between April 8, 2008 and July 1, 2009. How and why they picked those dates; Read more
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