Tag: housing

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Housing Takes Baby Steps Towards Better Balance – WSJ

Supply of new and existing homes for sale stood at 8.4 months at August’s selling rates, down from a large supply of about 11 months a year ago. Equally important, fewer homes are waiting to go on the market. This so-called “shadow inventory” consists of homes in foreclosures, those already repossessed by the lender or homes with a mortgage delinquent for 90 days or more. Mortgage-data provider CoreLogic estimates the shadow inventory totaled 1.6 million in July, down from 1.9 million a year ago.

via Housing Takes Baby Steps Towards Better Balance – Real Time Economics – WSJ.

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Fed Shifts Bond Portfolio – WSJ.com

The Fed is trying to ease financial conditions without taking the more controversial step of increasing the amount of money that it’s pumping into the financial system, since it will be using money already generated from other programs. A bond buying program the Fed completed in June was widely criticized internally and externally because it pumped $600 billion of newly printed money into the financial system, sparking fears of inflation……..

The more potent step of launching a new round of bond purchases that would further expand the Fed’s $2.867 trillion balance sheet remains a possibility, but inflation likely would need to slow much further to spur Fed officials to take that step……..

Economists aren’t so sure that the Fed’s latest gambit will do much to spur growth.

“The odds are ‘Operation Twist’ won’t work,” Anthony Sanders, a real-estate finance professor at George Mason University, said before the Fed action. The housing market has shown no reaction to interest rates that are already at record-low levels, he said. Freddie Mac’s latest survey finds the average rate on 30-year, fixed-rate mortgages at 4.09%, the lowest level in more than 50 years.

via Fed Shifts Bond Portfolio – WSJ.com.

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Home building down 5% in August as slide continues – latimes.com

U.S. builders broke ground on fewer homes in August, more evidence that the housing market remains depressed.

The Commerce Department said Tuesday that builders began work on a seasonally adjusted annual rate of 571,000 homes last month, a 5% decline from July and a three-month low. That’s less than half the 1.2 million homes that economists say is consistent with healthy housing markets.

via Home building down 5% in August as slide continues – latimes.com.

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Housing Is to the U.S. What Greece Is to the Euro Zone – Real Time Economics – WSJ

The beleaguered housing sector is looking like the Greece of the U.S. economy. Just as the euro zone won’t prosper until Greece gets its act together, the U.S. recovery won’t gain traction until the housing sector deals with the excesses of its past……..

Housing and related mortgage problems remain a large drag on economic growth. In August, housing starts stood at a annual rate of 571,000–just one-third of its pace during the boom. And the weak September reading on home builders sentiment suggest builders see more declines ahead.

via Housing Is to the U.S. What Greece Is to the Euro Zone – Real Time Economics – WSJ.

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RBNZ throws cold water on RBA – macrobusiness.com.au

What should be clear…… is that the growth in Australian housing values has been funded, to a large extent, by foreign borrowings, much of it short-term.

A key risk going forward is that the banks’ ability to refinance their borrowings rests with the willingness of foreign investors to continue to lend them money. But in times of heightened risk-aversion – such as the impending European debt crisis – foreign investors can become nervous and less inclined to continue extending credit, which could leave Australia’s banks, house prices, and broader economy exposed to a sudden funding freeze.

via RBNZ throws cold water on RBA – macrobusiness.com.au

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