October 13, 2006 at 8:57 PM #7734MHParticipantCan't believe I – a relative newby to this site – am the first to post this. Got to love the monthly updates from Lehreah – I'm not too sure how to link so I just pasted the CNN article below (bold is mine).Realtors: Home sales weaker, prices lowerTrade group expects 1.6% rise in median prices, a smaller increase than forecast last month.October 11 2006: 5:47 PM EDT
WASHINGTON (Reuters) — U.S. home sales for the year will be weaker, and price appreciation will be smaller than previously forecast, a realtors group said on Wednesday.
In its monthly economic outlook, the National Association of Realtors lowered expectations for the two key housing indicators but said strong economic fundamentals signal that the market will stabilize.
"Given a positive economic backdrop of lower interest rates and job creation, we expect sales activity to pick up early next year," said David Lereah, NAR's chief economist.
For this year, though, the group expects the housing market to end weaker than it had previously predicted.
The median home price – the price at which half of the homes sell for more and half for less – is likely to rise 1.6 percent to $223,000 for all of 2006, the group said Wednesday.
In September, the group saw a rosier picture for home prices when it said the median price for existing homes should grow 2.8 percent to $225,900.
During the white-hot housing market of 2005, prices appreciated 12.4 percent.
On Wednesday, the group also said existing home sales are expected to drop 8.9 percent to 6.45 million for the year.
Last month, the group predicted that existing home sales would drop 7.6 percent to 6.54 million. In August, the group said it predicted existing home sales would fall only 6.5 percent.
Even after revising its home sales estimate for the year, NAR noted 2006 is expected to be the third-strongest year for sales after consecutive records in 2004 and 2005.
The 30-year fixed-rate mortgage will probably average 6.5 percent in the fourth quarter but will trend up modestly in 2007, the group said.October 14, 2006 at 7:21 AM #37876lostkittyParticipant
Thank you for posting that MH. Everyone was getting on Powayseller for posting articles that were not written by her personally. They didnt like that she was “posting other people’s reporting and analysis.” I, for one, appreciate it when stuff like this gets posted here. I dont have time to cruise all the news outlets looking for bubble related articles, and I missed this one.
Fantastic that they are compiling the multiple estimates by Lehreah and NAR and showing how greatly their numbers have changed month by month. Shows that they are clearly clueless and their numbers are just following behind as the market turns instead of predicting which way it will go.
Thanks!October 14, 2006 at 8:41 AM #37879LookoutBelowParticipant
This administration has built its entire economy on cheap lending for homes to paper over the dot com disaster. They will tell you that jobs are up for the quarter, while people are starving on the streets.
Next I expect the real estate to be "reported" that its back on the rise and high tech stocks are going to be the next big boom (again) Hahahahaaaa
Believe 1/3rd of what you read and NONE of what you see on the TV.October 14, 2006 at 9:00 AM #37882PerryChaseParticipant
I second lostkitty’s comments. I also don’t have the time to look for bubble related articles and I appreciate someone pointing out interesting news.October 15, 2006 at 12:38 PM #37936powaysellerParticipant
The guy working on my website is on vacation for 2 weeks, as his wife is having a baby, but I will have all that on there, as well as plenty of graphs.
There has been an ongoing debate between me and some others about the affordability of ARMs. Some say that ARMs are used by plenty of folks just to manage their cash flow, while I am guessing that the great majority of ARMs are affordability solutions, and when they reset, those borrowers will face foreclosure.
I came across this yesterday from the FDIC website:
“Why is 30 percent of the mortgage market still booking into adjustable-rate mortgages? Because we believe they couldn’t otherwise afford to squeeze themselves into a home or they’re squeezing themselves into a more expensive home for affordability factors.”
This is a very good point: at historic low interest rates, why wouldn’t every borrower secure a fixed rate mortgage at 5%? Why get an adjustable at 3% or 4%, knowing it will keep going up, and could well end up over 7%,8%, 9%? Because they can’t afford the darn house at 5%, that’s why!
Fannie Mae reported that 88% of refis last year were at a higher interest rates. Americans are so desperate to get the cash from their homes, that they are willing to refinance at a *higher interest rate*. The only time my husband and I ever refinanced, was to get a lower interest rate on a 15 year or 30 year fixed rate mortgage. Refinancing into a higher interest rate, to me, shows the borrower is seriously strapped. 88% of conventional loan refis in this country were at a higher interest rate. That is a shocking statement.
I also prefer that we change the name “housing ATM” into “housing credit card” or “housing line of credit”. Mortgage equity withdrawal is debt. ATM is a term for money that is saved, not for a line of credit.October 15, 2006 at 4:42 PM #37946waiting hawkParticipant
I disagree. I think most Americans feel bad about having a lower rate and refi into a higher one so they can sleep at night knowing that they are not screwing the system.
Edit: Can’t wait for the site PS. Hurry it up!
Edit 2: Just bought “America’s Bubble Economy” and into Chapter 2. Beside buying college books years ago I NEVER buy any books. I always read online. Just something about how 95% of economist didn’t see the dot com bust and those itulip.com guys did that makes me wonder more.
- You must be logged in to reply to this topic.