Our Changing Globe

Posts Tagged ‘statistics’

The gain in U.S. house prices of .7% in February is the first consecutive monthly gain in two years, and is interpreted by some, but not all experts, as a sign that an end to the real estate slump might sight.

The February prices were still 6.5% lower than a year earlier and were pretty much in line with estimates, and also a recent statement by Federal Reserve Vice Chairman Donald Kohn, “As demand firms, and once inventories of houses, and a broad range of goods are brought into line with sales, economic activity should begin to stabilize,”

The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan increased by 5.3% last week and a National Association of Realtors report notes that home sales rose by 5.1% in February.

The number of Americans that signed contracts to buy previously owned homes rose by 2.1% in February, which was led by a 14.5% jump in the Midwest, and a 10.6% increase in the Northeast.

The California and Florida metropolitan areas led the U.S. in foreclosures in the first quarter of this year, and Bruce Norris, who is a principal with the Norris Group said, “Whatever damage has been done in California is only going to get worse because there is a glut of homes owned by lenders that aren’t yet on the market. These homes are like a shadow inventory that is likely to drag down prices further when they come onto the market”.

Norris’s comments are supported by comments on the National Association of Realtors website which states, “U.S. home prices probably will fall 5.1% this year to $188,500, less than the 9.3% plunge in 2008, according to the real estate group. Home resales probably will rise 1% to 4.96 million after a 13% drop last year”.

Read the rest of this entry »

Consumer confidence is important, but what should we believe when one headline tells us that, “The banks have enough cash”, whilst another screams, “Mortgage delinquencies among the most creditworthy homeowners rose by 50% last month”.

After Treasury Secretary Timothy Geithner said, “the vast majority of the nation’s banks have enough capital”, U.S. stocks advanced the most in almost two weeks, and Walter “Bucky” Hellwig, who helps oversee $30 billion at Morgan Asset said, “Geithner’s comments that most banks are OK got money coming back into stocks because that pretty much allays yesterday’s fears about stress tests and banks having to raise more capital”.

Even General Motors Corp. rose 2.4 percent to $1.70 after a government auditor said the Treasury will supply the automaker with $5 billion in additional aid.

Meanwhile, David Heupel, who helps manage $60 billion at Thrivent Financial for Lutherans said, “There are still signs of a tough economic environment, but companies that have really cut down their expenses are starting to see a little glimmer of life”.

The “tough economic environment” part of his comment would appear to be something of an understatement however, because the number of so-called prime borrowers who are at least sixty days behind on mortgages owned or guaranteed by Fannie Mae and Freddie Mac rose to 743,686 in January, from 497,131 in December, and that’s almost double the October total.

Fannie Mae and Freddie Mac who are the biggest U.S. mortgage-finance companies, either owning or guaranteeing 56% of all U.S. home loans, just announced that mortgage delinquencies among their “most creditworthy homeowners”, rose by 50% in just one month, and they blamed the fall on both drops in income and too much debt, with 34% of borrowers telling Fannie and Freddie that they were earning less money, and around 20% citing too much debt as their reason for missing their mortgage payments, with a further 8.1% blaming unemployment.

Read the rest of this entry »