Here are the five housing data trends that you need to know:
1. Housing construction has slumped. - New-home construction starts dropped 14.3 percent from December to January, putting them 37.8 percent below the same time a year earlier. Building permits dropped 28.6 percent from a year ago.
2. Sales volumes are down. - Last month's sales of existing homes were down 4.3 percent from January 2006. There are about 1 million homes on the market.
3. Home builders can't shift their inventory. - Between January 2006 and January 2007, new home sales dropped 20 percent, according to the Commerce Department.
4. Risk premia (i.e. long term mortgage rates) are rising. - The National Association of Realtors predicts the cost of a 30-year fixed mortgage will jump to about 6.6% by the end of the year.
5. Mortgage resets will accelerate.- Of the $8 trillion to $9 trillion in mortgage debt outstanding in the country, a half-trillion dollars' worth is about to be converted to higher interest rates now that introductory teaser periods are expiring
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1 comments:
Markus Arelius said...
And the insatiable consumer spending continues, the household debt accumulates, fuel prices are cents away from their highest pointn in history (in the U.S.).
Horrifying to witness perhaps. But if the ultimate reaction to these variables and events is a positive change for the overall market (market correction, financial destruction of gamblers/speculators, improved market regulation, additional consumer information), then I am for it.