National Association of Realtors Real Estate Forecast
For the week of March 9, 2009 – Vol. 7, Issue 10>> Home Base
INFO THAT HITS US WHERE WE LIVE Last Tuesday, the National Association of Realtors said their Pending Home Sales Index for January dropped 7.7% from December and was down 6.4% year-over-year. But an NAR index that tracks housing affordability rose to a record level in January. This was because the combination of mortgage rates, family income and home prices in January were "the most favorable since tracking began in 1970," according to the group.
The NAR also forecasted that existing home sales would rise 0.3% this year, then 5.8% in 2010. The median price would fall 4.9% this year, but rise 3.9% in 2010. New home sales would be down over 39%, with the slowdown in building and the need to trim inventory. But the median price for new homes would drop only 3% this year, then rise 4.2% in 2010. All these facts, figures and forecasts point to one thing. If people find good value and a good mortgage rate on a home they love, this is the year to buy.
Wednesday, the US Treasury released the guidelines f or its Making Home Affordable programs. The Home Affordable Refinance program will help 4 to 5 million homeowners get into a fixed rate mortgage at today's lower rates, even though their homes have lost value. The Home Affordable Modification program will help 3 to 4 million at-risk homeowners avoid foreclosure by reducing their monthly mortgage payments. Both programs will help keep people in their homes and stabilize prices. I have a summary of the guidelines and I'm happy to help people through them.
>> Review of Last Week
ROUGH RIDE… It was another week when all the major stock market indexes took a bumpy trip down, with the S&P500 at its lowest level in 12 years. The reasons were familiar…concern about the financials and uncertainty about when things will turn around for the credit markets and the economy.
The week got started with big financial player AIG owning up to a big $61 billion Q4 loss. The US Treasury responded by saying it will provide another $30 billion if needed. We also had a couple of big banks cutting dividends to save capital (actually a rather rational move in today's environment). A bunch of retailers reported declining same-store sales for February, but Wal-Mart's same-store sales rose 5.1% and they raised their dividend! We wound up the week on=2 0a disappointing February jobs report, with the unemployment rate now at 8.1%, a tad higher than expected.
It wasn't that hard to spot positive signs, although neither Wall Streeters nor the media seemed to pay much attention. Consumer spending rose in January, as did personal income. In fact, after-tax, inflation-adjusted income has now gone up three straight months. No one thinks consumer spending will explode, but the worst may be over in that department. Meanwhile, the personal savings rate increased to 5% in January, its highest level since 1995.
For the week, the Dow fell 6.2%, to 6626.94; the S&P 500 went down 7.0%, to 683.38; and the NASDAQ slid 6.1%, to 1293.85.
This time around, the bad week in stocks gave us a good week in bonds, so the benchmark 10-year Treasury's price went up. Its yield, which runs counter to price, went back down below the 3% threshold, settling at 2.823%. The mortgage rate situation continues to be very very appealing.
>> This Week’s Forecast
ALL EYES ON WASHINGTON… This Thursday the House Financial Services Committee will meet on mark-to-market accounting. Many analysts and industry groups feel that suspending mark-to-market accounting could ease capital concerns at banks. This would give them increased capacity to lend, which economists feel is key to our recovery. The cost to taxpayers? Nothing. The government suspended mark-to-market accounting in 1938 and did not reinstate it until right when this crisis began in late 2007. Hmmmmm…
Not much in the way of corporate earnings and just one significant economic report – Retail Sales on Thursday.
>> The Week’s Economic Indicator Calendar
Economic Calendar for the Week of Mar 9 – Mar 13
|
Date |
Time (ET) |
Release |
For |
Consensus |
Prior |
Impact |
|
W |
10:30 |
Crude Inventories |
3/6 |
NA |
NA |
Moderate |
|
Th |
08:30 |
Initial Jobless Claims |
3/7 |
NA |
639K |
Moderate |
|
Th |
08:30 |
Retail Sales |
Feb |
–0.4% |
1.0% |
HIGH |
|
Th |
08:30 |
Retail Sales ex-auto |
Feb |
–0.2% |
0.9% |
HIGH |
|
Th |
10:00 |
Business Inventories |
Jan |
–1.1% |
–1.3% |
Moderate |
|
F |
08:30 |
Trade Balance |
Jan |
–$38.2B |
–$39.9B |
Moderate |
|
F |
10:00 |
U of Mich Consumer Sentiment-Prelim |
Mar |
56.3 |
56.3 |
Moderate |
This post information was provided by: Greg Brooks southwest area manager San Diego Mortgage Network (800) 287-8292 x 225 San Diego homes for sale
Recent Related Posts:
San Diego Real Estate & Mortgage Views
Existing Home Sales & Values Drop in January
Real Estate ‘Insiders’ Forcasts … Dead Wrong for 2008
Comments are closed.
Our economic condition was caused by lack of regulation, politicians, Greenspan, or any other government entity. It was caused by people taking out mortgages that they are not repaying. Derivatives were only risky investments if borrowers defaulted on their loans. Bank funds only dry up if people default on their loans. Look up and down your neighborhood streets to find the culprits responsible for the economic catastrophy.
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OK People, for those too dopey to attend Freshman Economics: Since 2001, the Federal Government has created a deficit of $3 Trillion. We’ve devalued the dollar and borrowed money from China; thus creating an inflationary, recessionary economy. While interest rates were artificially low, people borrowed mortgage money at the going rate. Mr. Berneke and his buddies created this situation and now they need to fix it. $25 Billion is only 2.5 months of budget for the Iraq war. Small potatoes…
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CA was the perfect state for the subprime mortgage mkt. When you have statistics that show less than 20% of the state can afford to buy a home and yet people were buying houses like nobody’s business there had to be some fancy math going on. They were reporting in 2006 that 80% of new mortgages were non-traditional variable rate/interest only loans because the only way to get people into these overpriced homes was to get creative. Never in our history had home prices skyrocketed like they had in the past 10 years and everyone wanted in on the gravy train, from the person selling his home, the realtor handling it, the banks wanted the bigger mortgages, to the people that thought they deserved an expensive home, to the banks allowing equity to soar so people could turn their homes into ATMs and the banks would get years of interest.
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