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Well, not
really. But at least one seems to be on something
when he makes a pronouncement like this:
"U.S.
Home Prices ‘Unlikely’ to Fall Further" (Bloomberg)
Homes in the
U.S. are the most affordable they've been in decades and prices may start to
climb as soon as the third quarter, Housing and Urban Development Secretary
Shaun Donovan said today.
"It's very
unlikely that we will see a significant further decline," Donovan said
today on CNN. "The real question is when will we
start to see sustainable increases. Some think it will be as early as the end
of this summer or this fall."
Home sales have
increased in six out of the past nine months and the number of property
owners in default is declining, Donovan said on CNN's "State of the
Union" program. Housing prices will begin rising as the number of
foreclosures declines, he said.
"In the
long run, it's a good time to buy," Donovan said. "It's so
affordable today compared to where it's been for generations."
Of course, the
data-driven realities of the current housing market suggest otherwise.
In fact, if the following reports are any guide, now is actually a good
time to sell.
"Equifax
Study Points to Continued Housing Woes" (Atlanta
Business Chronicle)
The economic
recovery following the Great Recession has been hampered by a weakened
housing market, a new study from Atlanta-based Equifax Inc. shows.
Equifax’s
national credit trend research for May found mortgage delinquencies still
exceeded pre-recession levels due to ongoing instability the mortgage
marketplace. High shadow inventory levels are contributing to the continued
rise of severe mortgage delinquencies and write-offs, the company noted.
According to
Equifax research, write-off dollars for home finance, which includes first
mortgage and home equity installment loans as well as home equity revolving
accounts, are still climbing and have yet to show signs of peaking. Home
finance write-offs reached $304.6 billion in 2010, compared with a combined
total of $126.7 billion for 2006 and 2007.
The study also
found first mortgage real estate owned (REO) rates remain high as lenders
struggle to divest of properties unsuccessfully sold through a short sale or
foreclosure auction. REO rates since March are on the rise and causing
continued economic strain, Equifax said.
"Homebuyer
Reality Check: It's a Buyer's Market" (Associated
Press)
Why are so few
people buying houses? One of the key reasons is falling prices.
Although lower
prices encourage true bargain hunters to look for deals, they can also scare
off homebuyers who fear the bottom has yet to come. And, between the two,
anxiety is winning.
This spring,
home prices in major cities were back to the same levels reported in the
summer of 2003. Although prices in several locations are beginning to rise
again, even with the increases, housing remains the weakest part of the U.S.
economy. Prices won't fully recover until the glut of foreclosures for sale
is reduced, companies start hiring in greater numbers, banks ease lending
rules and more people get comfortable again with buying a house.
"Don't
be Fooled by Higher May Home Sales: Radar Logic" (HousingWire)
Pending home
sales may have grown 8.2% between April and May, but a housing recovery
remains a ways off, real estate analytics firm Radar Logic said this week.
Radar Logic
picked apart the latest pending home sales report, saying 8.2%
month-over-month sales growth does not equate to a recovery when sales are
down 20.4% from last year when consumers rushed to buy to take advantage of
federal tax credits. Instead, Radar Logic concluded that May's pending home
sales remain "essentially flat."
Furthermore, an
influx of distressed properties, including many that are still waiting to
come online, remain a constant threat to market confidence and home prices,
according to the report.
"Regardless
of what may happen to sales contract activity in any given month, the fact
remains that the inventory of homes for sale and in the foreclosure pipeline
far outstrips current demand," Radar Logic said. "Potential buyers
are cognizant of this fact and the negative impact it will have on future
home price appreciation, and are therefore choosing to stay out of the
market. As long as the supply overhang persists it will weigh on housing
demand."
"CoreLogic: 10.9 Million Borrowers are Underwater" (Mortgage
News Daily)
Approximately
22.7 percent of all U.S. homeowners were in a negative equity position with
their mortgages at the end of the first quarter of 2011, down slightly from
23.1 percent in the fourth quarter of 2010.
In a report
released Tuesday, CoreLogic states that some 10.9
million borrowers are "underwater", i.e. owe more on their
mortgages than their property is worth and another 2.5 million borrowers (5
percent) were in a near-negative equity position,
which the real estate data and analytics company defines as having
less than 5 percent positive equity.
While the drop
in housing prices caused much of the negative equity, equity extraction was
also a key driver. Borrowers with second mortgages on their home were
twice as likely to suffer negative equity as those with only one lien.
18 percent of borrowers without home equity loans were underwater while 38
percent of borrowers with home equity loans were in a negative
position. A total of 4.5 million negative equity borrowers (40 percent)
have home equity or other junior liens.
"Big Banks Easing Terms on
Loans Deemed as Risks" (New
York Times)
As millions of
Americans struggle in foreclosure with little hope of relief, big banks are
going to borrowers who are not even in default and cutting their debt or
easing the mortgage terms, sometimes with no questions asked.
Two of the
nation’s biggest lenders, JPMorgan Chase and Bank of America, are
quietly modifying loans for tens of thousands of borrowers who have not asked
for help but whom the banks deem to be at special
risk.
[Editor's
(cynical) note: and they are doing this because they see housing bottoming,
right?]
"No
‘Definitive Signs of Improvement’ in Housing" (Flathead
Beacon)
A recent
housing report by the University of Montana Bureau of Business and Economic
Research comes to a sobering conclusion: “Three years into its real
estate slump, Montana’s housing markets do not yet show definitive
signs of improvement.”
The report
includes all the familiar words Montanans have learned to accept as reality.
Foreclosures. Declining prices. Debt. And the words may have to stay in our
everyday vocabulary for a while longer.
“Even as
the rest of the state economy swings to growth, the data clearly portray the
2010 as another year of adjustment and correction in Montana’s housing
markets,” the report states.
But the report
offers a “silver lining,” offering a word most people can
appreciate, unless they’re trying to sell their homes:
“affordability.” Even struggling markets have their upside.
Michael J. Panzner
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