No end in sight for the decline in the housing market:
The S&P/Case-Shiller index of property values in 20 cities fell 4 percent from April 2010, the biggest drop since November 2009, the group said today in New York. From March to April, prices fell 0.1 percent on a seasonally adjusted basis, the smallest decline since July 2010.
A backlog of foreclosures and falling sales raise the risk that prices will decline further, discouraging builders from taking on new projects. The drop in property values and a jobless rate hovering around 9 percent are holding back consumer sentiment and spending, which accounts for 70 percent of the economy.
“There’s no sign of any real recovery in housing yet,” Jim O’Sullivan, chief economist at MF Global Inc. in New York, said before the report. “There won’t be a significant turn until the labor market shows sustained improvement. The level of foreclosures is still high and a lot of people are delinquent on their mortgages.”
Anyone needing to sell their home right now is in a world of hurt.
Here is your chart for the day:
Burn this chart into your brain. Revert back to it whenever you hear the line of BS coming from the Obama administration, Democrats in general, and their propaganda stooges in the media, about how they and their policies “averted disaster” during the mortgage crisis, and how they saved our lives.
[Hat Tip: Zero Hedge]
Remember when newly elected President Obama, with Democrats in full control of the government , were going to use their compassionate and virtuous liberal ways to reverse the housing crisis?
Yeah, me too:
With foreclosures high and demand weak, home prices in a majority of the nation’s largest metropolitan areas posted fresh lows in December and pushed a widely watched index of real estate values close to a double-dip decline.
The Standard & Poor’s/Case-Shiller Index showed that prices in 20 major U.S. cities dropped an average of 2.4% in December from the same month a year earlier and 1% from November, the fifth straight month the index has fallen.
And experts said things could get worse.
“My intuition rates the probability of another 15%, 20%, even 25% real home price decline as substantial,” said Yale University economics professor Robert Shiller, co-creator of the index. “That is not a forecast, but it is a substantial risk.”
A recovery in housing prices seemed to be on track last year. But that improvement was fueled by federal home-buying tax credits that expired last summer, analysts said.
Without a stimulus, prices began to fall again.
Is anyone willing to stand up and admit that big government solutions to just about anything are a complete waste of time? Unfortunately for Democrats, the reality-based laws of economics don’t care about utopian fantasies.
Most efficient administration evah:
The Obama administration failed to release a report today on how Freddie Mac and Fannie Mae could be reformed, despite being required to do so by the Dodd-Frank law passed last summer.
Rep. Jeb Hensarling (R., Texas), who chairs the House Republican Conference, said in a statement that the White House’s failure to meet the deadline made it “crystal clear that the President is not serious about reforming Fannie Mae and Freddie Mac.”
“The Obama Administration’s repeated inability to propose a plan to reform Fannie Mae and Freddie Mac calls into question their commitment to taxpayer protection and their ability to effectively govern on this issue,” Hensarling added. “After more than $150 billion in Fannie and Freddie bailouts, we can no longer afford to allow the Administration to kick the can down the road.”
Kicking the can down the road is being kind. One of the most egregious storylines of the whole financial crisis, was the implicit corruption of the GSEs. Remember Franklin Raines? The accounting scandals? The royal screwing they gave to US taxpayers?
Yeah? Well, the administration would rather we didn’t.
Housing prices take a tumble:
A new bout of declining home prices is threatening to hamper the U.S. recovery, just as consumers and the overall economy have been showing signs of healing.
Home prices across 20 major metropolitan areas fell 1.3% in October from September, the third straight month-over-month drop, according to the S&P/Case-Shiller home-price index released Tuesday. Many economists expect the declines to continue into at least next spring, erasing most of the gains made since prices bottomed out in early 2009.
The housing market, which appeared poised for a recovery earlier in the year, now could be heading for a second downward drift.
“This looks like a double-dip [in housing] is pretty much on the way, if not already here,” said David Blitzer, chairman of the Standard & Poor’s index committee. “Somebody who thought last year that it’s going to be straight up from here was wrong.”
Homes remain a key part of Americans’ wealth. Households held $6.4 trillion of home equity at the end of the third quarter, alongside $12.2 trillion in stocks and mutual-fund shares, according to Federal Reserve data.
Wasn’t the government supposed to
put an artificial floor in the real estate market financed by taxpayer dollars implement benevolent government programs designed to reverse evil George Bush’s real estate recession? Isn’t that what we heard incessantly from the Obama Democrats in the early days of this administration?
Yeah, about that.
Along the lines of my earlier post about Barney Frank’s complicity in the Fannie Mae-Freddy Mac disaster, here is a new video ad on the same, which hits all the right notes:
Donate here to help run this ad in MA-7 for the home stretch.
The government’s bill for bailing out Fannie Mae and Freddie Mac might reach as high as $363 billion by 2013, the Federal Housing Finance Agency said Thursday.
The twin mortgage giants have already sucked in $148 billion in order to stay afloat, and according to the new projections, that number might reach $221 – $363 billion by 2013.
The Treasury Department has been supporting the foundering Fannie (FNMA) and Freddie (FMCC) since the twin mortgage giants entered financial difficulty following the implosion of the mortgage-backed securities market.
The two companies essentially have been given a blank check from the government since Treasury lifted the $200 billion funding limit for each late last year.
While the Obama administration and the Democrats in Congress are more than willing to excoriate the private sector bankers and traders for whatever blame they share in the current economic crisis, not a word is spoken about Fannie and Freddy, and the looming disaster they pose for the nation’s balance sheet—-all at the expense of taxpayers.
One of the Congressional enablers of this mess is Barney Frank. He needs to be voted out of office and the good people of Massachusetts’ 4th district have a clear alternative.
I’ll let Sean Bielat’s recent campaign ad speak on behalf of the arrogance and idiocy that is Barney Frank, who was minding the store while the housing market collapsed:
In any other year, the notion of being able to vote Barney Frank out of office would be insane. But this is unlike any other year. As with so many races across the country, if getting insane liberal Democrats out of their entrenched political ratholes was ever possible, now is the time.
Other bloggers have been pushing this race as a potential pick-up for the GOP and momentum is building. We know about Frank lending his campaign $200K, and that doesn’t happen when you’re confident down the stretch. And kudos to Stacy McCain who’s been pounding the table for Sean Bielat for weeks.
Voters in Massachusetts’ 4th Congressional district have a clear choice–more of the same, with $386 billion bailouts to GSEs that promote left-wing social engineering, or some real change.
Thank goodness Obama and the Democrats are really on the ball when it comes to the economy:
Sales of new homes collapsed in May, sinking 33 percent to the lowest level on record as potential buyers stopped shopping for homes once they could no longer receive government tax credits.
The bleak report from the Commerce Department is the first sign of how the end of federal tax credits could weigh on the nation’s housing market.
The credits expired April 30. That’s when a new-home buyer would have had to sign a contract to qualify.
“We fear that the appetite to buy a home has disappeared alongside the tax credit,” Paul Dales, U.S. economist with Capital Economics,” wrote in a note. “After all, unemployment remains high, job security is low and credit conditions are tight.”
New-home sales in May fell from April to a seasonally adjusted annual sales pace of 300,000, the government said Wednesday. That was the slowest sales pace on records dating back to 1963. And it’s the largest monthly drop on record. Sales have now sunk 78 percent from their peak in July 2005.
Analysts were startled by the depth of the sales drop.
“We all knew there would be a housing hangover from the expiration of the tax credit,” wrote Mike Larson, real estate and interest rate analyst at Weiss Research. “But this decline takes your breath away.”
It’s almost as if the Federal government was subsidizing market behavior and created an artificial floor in the housing market.
Nah. That couldn’t be.
Remember during the 2008 campaign when Democrats couldn’t stop telling us how the Bush administration and Republicans caused the mortgage crisis? And how Barack Obama and Democratic majorities in both houses of congress was the only way to heal the mortgage market?
Loans guaranteed by the Federal Housing Administration, the U.S.-owned mortgage insurer, may be involved in more home-purchase transactions than borrowing financed by Fannie Mae and Freddie Mac.
The FHA and Fannie Mae and Freddie Mac, which regulators seized in 2008, have been financing more than 90 percent of U.S. home lending after a retreat by banks and the collapse of the market for mortgage bonds without government-backed guarantees.
FHA lending last quarter may have topped the combined volume of government-supported Fannie Mae and Freddie Mac in a home-lending market that’s still a “government-financed market,” David Stevens, the agency’s head, said today at a conference in New York, citing research by consultant Potomac Partners.
“This is a market purely on life support, sustained by the federal government,” he said at the Mortgage Bankers Association conference. “Having FHA do this much volume is a sign of a very sick system.”
The FHA, which backs loans with down payments as low as 3.5 percent, insured $52.5 billion of home-purchase mortgages in the first quarter, compared with $46 billion of purchases of the debt by Fannie Mae and Freddie Mac, according to data compiled by Washington-based Potomac Partners.
Got that? Very. Sick.
As much as the American people and our elected overlords in Washington would like to just wish the mortgage mess away, the reality is that there still is a mortgage mess.
The GSEs are accumulating mortgage loans and are housing them off the books of the federal budget. In other words, the liabilities are off-balance sheet items, and the risk is swept under the rug. But now the rug is one big bloated rug, bursting at the corners.
The Federal government now holds the majority of mortgage loans in the United States, and with delinquencies on the rise, guess who’ll be left holding the bag when the whole thing comes crumbling down? Yours truly.
But let’s see now. The Democrats have essentially been in control of the Federal government for the better part of three years now. They’ve had the majorities and the wherewithal to shape economic policy to their liking. And the mortgage market is still in the toilet.
Miss Bush yet?
Goldman Sachs found itself in a bit of trouble today:
Goldman Sachs Group Inc.—one of the few Wall Street titans to thrive during the financial crisis—was charged with deceiving clients by selling them mortgage securities secretly designed by a hedge-fund firm run by John Paulson, who made a killing betting on the housing market’s collapse.
The civil charges against Goldman and one of its star traders, 31-year-old Fabrice Tourre, represent the government’s strongest attack yet on the Wall Street dealmaking that preceded, and some say precipitated, the financial crisis that gripped the nation and the world. Goldman’s shares fell 13%, one of the steepest slides since the firm went public in 1999, erasing some $12 billion of market capitalization.
The SEC lawsuit likely strengthens the position of President Barack Obama as he tries to push financial-overhaul legislation through Congress. He vowed Friday to veto any version of the bill that doesn’t bring the derivatives market “under control.”
It’s interesting that this charge is coming on the eve of vote on the Democrats’ financial regulation bill, which more than likely, will have gained momentum from today’s news. The other story of course, is that it gives Democrats some ammo going into the midterms and to the President for his re-election bid in 2012 as well.
That’s essentially what this story is about until I can tell otherwise.