Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

A Mixed Picture In The U.S. Housing Market

Housing-Market / US Housing Oct 23, 2009 - 02:08 PM GMT

By: Sy_Harding

Housing-Market

Best Financial Markets Analysis ArticleIn early 2007, after the real estate bubble began bursting and the extent of the problems from sub-prime mortgages became more clear, I predicted the aftermath would have the economy in the worst recession since 1973-74 by the end of the year (2007).


At the time, I also said the problems for the economy began in the housing industry and the recovery would also eventually begin in the housing industry.

Continuing to emphasize the importance of the housing industry, in predicting in February of this year that the stock market would launch into a substantial rally off its very oversold condition, I said the catalyst for the rally would probably be a temporary improvement in economic reports, including housing and retail sales. And that did happen.

Unfortunately, the improvement was indeed temporary. In the last month or two economic reports have turned sour again, with home sales and retail sales declining again (job losses and mortgage defaults rising, and consumer confidence falling).

It became clear that the temporary improvement in home and auto sales in the summer was due to the $8,000 government bonus to 1st time home-buyers, and the $4,500 ‘cash for clunkers’ deal for auto buyers.

The return of negative economic reports raised concerns about the sustainability of the economic recovery. So recently I have been saying that while the market was excitedly anticipating 3rd quarter earnings, I was more interested in seeing the next reports from the housing industry, due out this week.  

And we have now seen and can analyze those reports.

The first was the Housing Market Index, which measures the sentiment or confidence of home-builders. Their confidence had been picking up in the summer months, although very fractionally, as they experienced an improvement in ‘traffic’ and sales.

But Tuesday’s report showed the index has fallen again, from September’s already low 19, to 18 this month.

The following day’s report showed why builder confidence is falling again. It was reported Wednesday that new housing starts previously reported for August were revised downward, and starts in September were flat. Even more discouraging, building permits for future starts fell 1.2%.

Meanwhile, the Case-Shiller S&P Home Price Index report a couple of weeks ago was encouraging. It showed that home prices rose 1.6% in July, the 3rd straight month of price increases. Unfortunately, it was old data. We’re interested in what has happened to home prices since the temporarily improved conditions of the summer months.

What makes it compelling that we see later data on home prices is a startlingly gloomy forecast by famed banking analyst Meredith Whitney. Whitney says home prices, which have already declined 33% nationally from their peak in 2006, are set to begin falling again. And not by a small amount, but by another 25% from here.

Few real estate experts think the bottom is in for housing prices. But Whitney’s forecast is seen as too gloomy, even alarmist. Yet, credit-rating firm Moody’s expects a further decline of 10% from here. There are already more than enough people owing more on their mortgages than their homes are worth. So a resumption of price declines would certainly not be a positive for the economy.

The most encouraging of this week’s housing reports, was Friday’s report from the National Association of Realtors that ‘existing home’ sales shot up an unexpected 9.4% in September. That was especially good news since the NAR’s previous report was that existing home sales fell 2.7% in August, which ended four straight months of sales increases during the summer.

The stock market didn’t take any encouragement from the report however, possibly because it’s expected that when the NAR releases more information in a couple of weeks, it will show that roughly 40% of sales in September were to buyers scrambling to get in under the wire before the $8,000 bonus program for 1st time home-buyers expires. The concern is that sales will tumble again, as happened to auto sales once the ‘cash for clunkers’ program ended.

By the way, there are some disturbing reports regarding the 1st time buyer program.

I have heard from a number of 1st time buyers who closed on their homes a couple of months ago and expected to receive their $8,000 bonus immediately. But they have yet to receive it and are being told it will be another month or two before they do. And at a hearing on

Thursday the Treasury Department reported that the legitimacy of about 100,000 claims for the bonus is being questioned. That can be kind of scary for those who were assured by real estate agents that they qualify and cannot afford the home without the bonus to pay off credit cards or whatever.

Until next time.

Sy Harding publishes the financial website www.StreetSmartReport.com and a free daily market blog at www.SyHardingblog.com.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules