No denying there has been an uptick it'll be interesting to see how long it lasts. Between low rates, sellers willing to deal during the slow times, and still lax lending standards December shouldn't be that bad.
With how far overpriced everything is and the huge glut in inventory, I think the only uptick will be a slight uptick in volume. The speculation is over.
Here's a slightly off topic question for the audience:
Hypothetically speaking, if I had gotten a 7/1 arm in mid-2003 and had a 4% rate locked in through late 2010, and I want to lock in today's interest (treasury) rate environment as the basis of a future refinancing, what is the most efficient way to go about doing so? Effectively, I want to be short the 10-year in four years' time. So far, the best idea I have been given is to sell treasury futures and roll the position forward continually. Any other ideas would be most welcome.
Well, I guess the game is to keep lowering rates until the housing market stabilizes. Call me Capt. Obvious.
I just don't see how the dollar can withstand this. Although I note it has firmed up a bit today. Is it really possible that our foreign creditors will allow this to continue, how rates don't have to go up significantly?
Countrywide Financial Corp., the nation's largest mortgage lender, will compensate as many as 4,500 black and Hispanic borrowers under an agreement announced Tuesday with New York Attorney General Eliot Spitzer.
The agreement ends the attorney general's probe of Countrywide for possible violations of fair-lending laws that Spitzer said were suggested by patterns in mortgage data collected each year by the federal government. Spitzer's office examined mortgages made in 2004.
Countrywide, which denied any wrongdoing, has agreed to review the loans in question to make sure the customers were charged the same rate as white borrowers with similar financial histories. The company made 20,000 mortgage loans in New York in 2004, including the 4,500 to minorities.
The Purchase Index has been going up for a few weeks now. But this doesn't jibe with the decline in the Pending Home Sales Index just reported... any idea how to interpret this?
A Dead cat bounce may be occuring here in Northern Virginia. Existing home sales have stablized or ticked up slightly over Oct. and Nov. Prices also have ticked up in Nov. As expected, listings are falling rapidly through the holiday season (mostly due to expirations and withdrawals not sales).
I'm not sure if this "stabilization" as Toll claims will keep volume and prices at current levels. I think we may be seeing a dead cat bounce that will gain a bit of altitude as we head into early spring. Eventually I expect a massive inventory pile-up in spring to cause price declines to resume. Further declines will spook new buyers and volume will continue to shrink next summer.
Purchases a year ago were 476.2, Refi's were 1484.3, so the Pending Home Sales Index being down still jibes with the data. There is a huge refi push, and it might be possible that the people who make up the MBA index are getting a bigger slice of the business (maybe a more coordinated refi push?)
The bear spin never changes: Storm clouds 100 miles offshore can mean but one thing: Doom. When those clouds have disapated at landfall they are ignored if possible or rationalized if required so that the focus can once again be the impending doom 100 miles offshore. Rinse and repeat. Why does a Bozo The Clown punching bag spring to mind?
I just don't see how the dollar can withstand this. Although I note it has firmed up a bit today. Is it really possible that our foreign creditors will allow this to continue, how rates don't have to go up significantly?
The foreign creditors aren't buying our debt to do us a favor, they buy our debt to keep their currency cheap so they can continue to export. Period.
Dollar slides - they buy more debt, especially 10 YR & MBS to 'defend' out dollar for us - rates go down as a side bar. Almost like a clock work mechanism.
Rates going down is NOT their intension - rather stopping the dollar fall is.
Its just one more price they have to pay to buy jobs and considering their alternatives its a cheap price - so far.
This is the 'keystone' in the 'soft landing' scenario... it is all predicated on foreign buyers of our (growing) levels of debt. It won't last forever but it can last an awful long time.
To look at the two extremes - you have Robert who sees no storms & bears who can't understand why the city below sea level isn't flooded now.
I agree with the bears we have serious problems and risks (like New Orleans being under water) but so far Rob't has been 'right' that the storms have stayed off shore.
But the day the foreign debt market winds switch - and who knows what will drive that and when - that's when we got serious problems and a whole lotta debtors won't be able to evacuate in time. They should already be on or heading to higher ground now.
But that's not to say the revelers still at the party back in the city aren't going to have one helluva a good time in the meantime.
china wins either way. either they keep rmb cheap and sell and make jobs. or they drag the US deeper into debt where it defaults and the china hegemony can begin.
"In September, police in Madison, Wis., said Milo G. Chamberlain's blood-alcohol content was .425, which experts said normally is attainable only by those either dead or in a coma, but he was picked up, quite conscious, allegedly causing a disturbance at a Marathon gas station, where he reportedly got into a fight with a gas pump before being restrained by passersby. Police said Chamberlain responded to each of their questions only by rattling off strings of numbers of no particular pattern."
"Purchases a year ago were 476.2, Refi's were 1484.3, so the Pending Home Sales Index being down still jibes with the data. There is a huge refi push, and it might be possible that the people who make up the MBA index are getting a bigger slice of the business (maybe a more coordinated refi push?)"
Tanta guzzles coffee, I drink Pepsi, so it takes considerably longer for me to shake the cobwebs.
Cal, I'm not following. ac's point was that the MBA purchase index data isn't jibing with the NAR's pending sales data. Pendings for November are lower than October. Yet, the MBA purchase data is higher for almost every week in November (vs. October).
winjr, I've been trying to get ahold of my favorite Insider all morning. It turns out that there's a QRM conference this week (QRM = mortgage hedging platform) and so 95% of the people who know anything really useful about mortgage application pipeline fallout happen to have a massive hangover this morning and can't figure out how to use their Blackberries.
At this point I will only observe that one pending home sale can easily produce more than one mortgage application. It's called "shopping."
"At this point I will only observe that one pending home sale can easily produce more than one mortgage application. It's called "shopping."
When will I get clipper coupons?!?! Any two-fers, I'm in.
Every week, Doug Noland tracks MBS sales which have been consistently dropping for months, on a YOY basis. (The overall ABS market has been tracking a similar route.) With Refi's apparently jumping the last four weeks, I would expect the MBS activity to pick up , as well. Saturday morning I'll construct a little table and see what's what.
If rates are falling then demand for money is falling. The message I get is that rates need to be lower to attract either refi or new home sales.
Just like any product, lowering price and credit terms is a sign of slack demand or increased competition. So off shore dollar flows need somewhere to go or they just pile up in the warehouse so to speak.
Regarding the pending sales/mortgage app situation, the answer is fairly simple: Timing. The Realtors' pending home sales index was an October number. The Mortgage Bankers Association's weekly purchase apps index actually stunk in October and set a marginal new cycle low the final week of the month. Then in November it started climbing and this most recent week, climbed some more. Long story short, November sales/pending numbers should look better than October. Hope that clears thing up.
As for whether this is a bounce, or THE BOTTOM, I'm skeptical of the latter and I explain why in a post up at my blog recently. Disregard or digest as you see fit!
winjr, we only close two-fers for fraud artists. Law-abiding citizens who submit multiple applications just get the one that pays the broker the most back-end points. Some people just don't understand how the free market works. You can trust me on this because I'm a mortgage weenie.
Sub prime MBS market has "begun" to melt-down in the past week. Liquidity is evaporating (at least temporarily). For anyone looking for the canary-in-the-coalmine, this could be it.
Interestingly, the rest of the world-wide credit/risk markets are paying zero attention.
I think real estate bubble deflates more like a stairway down.
A drop down. A recover. Another drop down, lower that the previous one. And so one.
The wave of lay-offs in construction and manufacturing just started. It will take time before it affects stock markets and real estate prices. We may have 2-3 months of flat real estate sales and prices. Maybe even a small spring rebound.
Bob: some stairways are steeper then others, here is a interesting post from a thread on siliconinvestor:
"At this moment, reality is that all major builders have land coming out of their ears. (the following numbers are a month or two old and has not been updated based on more recent company guidances, all lots include owned and optioned)
Using 2006 deliveries to calculate yrs of supply is generous to the builders since none is predicting same level of deliveries for FY 07.
If the market absorption rate deteriorates from here, the builders would have no choice but to reduce inventory one way or another. With such huge supply overhang, price wars may be very bloody.
BZH
95,000 lots
18,000 2006 deliveries
5.3 yr supply
"Using 2006 deliveries to calculate yrs of supply is generous to the builders since none is predicting same level of deliveries for FY 07."
That may be the biggest understatement I've ever seen on this thread. Even an optimistic look at 2007 deliveries takes those 5-6 year supply numbers to 8-9 years. IMHO
If rates are falling then demand for money is falling.
Or supply is increasing as in supply of MBS buyers looking to pump out US greenbacks in exchange for US denominated debt to say 'stabilize' the greenback vs. their currency.
"In September, police in Madison, Wis., said Milo G. Chamberlain's blood-alcohol content was .425, which experts said normally is attainable only by those either dead or in a coma, but he was picked up, quite conscious, allegedly causing a disturbance at a Marathon gas station, where he reportedly got into a fight with a gas pump before being restrained by passersby. Police said Chamberlain responded to each of their questions only by rattling off strings of numbers of no particular pattern."
Milo should be a poster boy for the bull case.
My goodness who would have thunk something like that could ever happen in Madison Wisconsin? If I didn't know better & the elections over, I'd have guessed he's running for Mayor of Madison.[/sarcasm]
I always need to be careful though when I make comments like that - I married a cheesehead (though THANK GOD she wasn't a Badger fan - that in our part of the world would have constituted a 'mixed marriage' - frowned upon on both sides of the river).
And for those of you who KNOW cheeseheads, 'no' I didn't meet her laying on the floor under a table in some cheesy bar. She was more than able to get up just fine all by herself.
On a semi-serious note - I used to go over to Madison to see U Minnesota - U Wisconsin sporting events 'back in the day'.
Back then they were the only on-campus stadium in the Big Ten that served beer and as far as I could tell if you had ID proving you were George Washington, then you got served.
I always wore my Minnesota colors proudly and prominently and was a loud a boisterous fan. As a result of point (1) they sold beer and point (2) me the fan... I always wore a rain coat no matter what the weather or even if I was inside (say at a Badger-Gopher hockey game)...
dryfly:
your point is probably much closer to the truth. with $12.4T in consumer debt you would think debt service cost would eat much of the excess dollars and be puting some pressure on cost of funds but money continues to pour out into the streets looking for american debt junkies.
dryfly, as someone who knows perfectly well what the difference is between a cheesehead and a shthead (answer: the Wisconsin-Minnesota border), I say, Numen Lumen (since my diploma doesn't actually have "Fck 'em, Bucky!" on it). Having spent some of the best years of my life in Madison, I find nothing strange about people named Milo fighting with gas pumps, although I confess that back in my day the gas pumps usually won.
No denying there has been an uptick it'll be interesting to see how long it lasts. Between low rates, sellers willing to deal during the slow times, and still lax lending standards December shouldn't be that bad.
With how far overpriced everything is and the huge glut in inventory, I think the only uptick will be a slight uptick in volume. The speculation is over.
Here's a slightly off topic question for the audience:
Hypothetically speaking, if I had gotten a 7/1 arm in mid-2003 and had a 4% rate locked in through late 2010, and I want to lock in today's interest (treasury) rate environment as the basis of a future refinancing, what is the most efficient way to go about doing so? Effectively, I want to be short the 10-year in four years' time. So far, the best idea I have been given is to sell treasury futures and roll the position forward continually. Any other ideas would be most welcome.
Well, I guess the game is to keep lowering rates until the housing market stabilizes. Call me Capt. Obvious.
I just don't see how the dollar can withstand this. Although I note it has firmed up a bit today. Is it really possible that our foreign creditors will allow this to continue, how rates don't have to go up significantly?
OT
Countrywide Financial Corp., the nation's largest mortgage lender, will compensate as many as 4,500 black and Hispanic borrowers under an agreement announced Tuesday with New York Attorney General Eliot Spitzer.
The agreement ends the attorney general's probe of Countrywide for possible violations of fair-lending laws that Spitzer said were suggested by patterns in mortgage data collected each year by the federal government. Spitzer's office examined mortgages made in 2004.
Countrywide, which denied any wrongdoing, has agreed to review the loans in question to make sure the customers were charged the same rate as white borrowers with similar financial histories. The company made 20,000 mortgage loans in New York in 2004, including the 4,500 to minorities.
Major lender cuts bias deal / Countrywide agrees to pay Latinos, blacks
I always think it's funny when I read, which denied any wrongdoing
The Purchase Index has been going up for a few weeks now. But this doesn't jibe with the decline in the Pending Home Sales Index just reported... any idea how to interpret this?
A Dead cat bounce may be occuring here in Northern Virginia. Existing home sales have stablized or ticked up slightly over Oct. and Nov. Prices also have ticked up in Nov. As expected, listings are falling rapidly through the holiday season (mostly due to expirations and withdrawals not sales).
I'm not sure if this "stabilization" as Toll claims will keep volume and prices at current levels. I think we may be seeing a dead cat bounce that will gain a bit of altitude as we head into early spring. Eventually I expect a massive inventory pile-up in spring to cause price declines to resume. Further declines will spook new buyers and volume will continue to shrink next summer.
Purchases a year ago were 476.2, Refi's were 1484.3, so the Pending Home Sales Index being down still jibes with the data. There is a huge refi push, and it might be possible that the people who make up the MBA index are getting a bigger slice of the business (maybe a more coordinated refi push?)
The bear spin never changes: Storm clouds 100 miles offshore can mean but one thing: Doom. When those clouds have disapated at landfall they are ignored if possible or rationalized if required so that the focus can once again be the impending doom 100 miles offshore. Rinse and repeat. Why does a Bozo The Clown punching bag spring to mind?
I just don't see how the dollar can withstand this. Although I note it has firmed up a bit today. Is it really possible that our foreign creditors will allow this to continue, how rates don't have to go up significantly?
The foreign creditors aren't buying our debt to do us a favor, they buy our debt to keep their currency cheap so they can continue to export. Period.
Dollar slides - they buy more debt, especially 10 YR & MBS to 'defend' out dollar for us - rates go down as a side bar. Almost like a clock work mechanism.
Rates going down is NOT their intension - rather stopping the dollar fall is.
Its just one more price they have to pay to buy jobs and considering their alternatives its a cheap price - so far.
This is the 'keystone' in the 'soft landing' scenario... it is all predicated on foreign buyers of our (growing) levels of debt. It won't last forever but it can last an awful long time.
To look at the two extremes - you have Robert who sees no storms & bears who can't understand why the city below sea level isn't flooded now.
I agree with the bears we have serious problems and risks (like New Orleans being under water) but so far Rob't has been 'right' that the storms have stayed off shore.
But the day the foreign debt market winds switch - and who knows what will drive that and when - that's when we got serious problems and a whole lotta debtors won't be able to evacuate in time. They should already be on or heading to higher ground now.
But that's not to say the revelers still at the party back in the city aren't going to have one helluva a good time in the meantime.
Expect a lot more drunken jeers from them all.
china wins either way. either they keep rmb cheap and sell and make jobs. or they drag the US deeper into debt where it defaults and the china hegemony can begin.
Expect a lot more drunken jeers from them all
From the Cap Times via News of the Weird:
"In September, police in Madison, Wis., said Milo G. Chamberlain's blood-alcohol content was .425, which experts said normally is attainable only by those either dead or in a coma, but he was picked up, quite conscious, allegedly causing a disturbance at a Marathon gas station, where he reportedly got into a fight with a gas pump before being restrained by passersby. Police said Chamberlain responded to each of their questions only by rattling off strings of numbers of no particular pattern."
Milo should be a poster boy for the bull case.
"Purchases a year ago were 476.2, Refi's were 1484.3, so the Pending Home Sales Index being down still jibes with the data. There is a huge refi push, and it might be possible that the people who make up the MBA index are getting a bigger slice of the business (maybe a more coordinated refi push?)"
Tanta guzzles coffee, I drink Pepsi, so it takes considerably longer for me to shake the cobwebs.
Cal, I'm not following. ac's point was that the MBA purchase index data isn't jibing with the NAR's pending sales data. Pendings for November are lower than October. Yet, the MBA purchase data is higher for almost every week in November (vs. October).
What am I missing, other than my second can?
Purchases include new homes. Builders are doing what they can to move inventory. NAR only part of the story.
Its funny to look at this mountain top were coming off from and to complain because its only as good as 2003.
winjr, I've been trying to get ahold of my favorite Insider all morning. It turns out that there's a QRM conference this week (QRM = mortgage hedging platform) and so 95% of the people who know anything really useful about mortgage application pipeline fallout happen to have a massive hangover this morning and can't figure out how to use their Blackberries.
At this point I will only observe that one pending home sale can easily produce more than one mortgage application. It's called "shopping."
"At this point I will only observe that one pending home sale can easily produce more than one mortgage application. It's called "shopping."
When will I get clipper coupons?!?! Any two-fers, I'm in.
Every week, Doug Noland tracks MBS sales which have been consistently dropping for months, on a YOY basis. (The overall ABS market has been tracking a similar route.) With Refi's apparently jumping the last four weeks, I would expect the MBS activity to pick up , as well. Saturday morning I'll construct a little table and see what's what.
Should this MA rise make the Fed consider an interest rate hike in the next meeting?
Rates Fall and Mortgage Applications Rise
If rates are falling then demand for money is falling. The message I get is that rates need to be lower to attract either refi or new home sales.
Just like any product, lowering price and credit terms is a sign of slack demand or increased competition. So off shore dollar flows need somewhere to go or they just pile up in the warehouse so to speak.
Regarding the pending sales/mortgage app situation, the answer is fairly simple: Timing. The Realtors' pending home sales index was an October number. The Mortgage Bankers Association's weekly purchase apps index actually stunk in October and set a marginal new cycle low the final week of the month. Then in November it started climbing and this most recent week, climbed some more. Long story short, November sales/pending numbers should look better than October. Hope that clears thing up.
As for whether this is a bounce, or THE BOTTOM, I'm skeptical of the latter and I explain why in a post up at my blog recently. Disregard or digest as you see fit!
Interest Rate Roundup
winjr, we only close two-fers for fraud artists. Law-abiding citizens who submit multiple applications just get the one that pays the broker the most back-end points. Some people just don't understand how the free market works. You can trust me on this because I'm a mortgage weenie.
Sub prime MBS market has "begun" to melt-down in the past week. Liquidity is evaporating (at least temporarily). For anyone looking for the canary-in-the-coalmine, this could be it.
Interestingly, the rest of the world-wide credit/risk markets are paying zero attention.
1998 anyone?!?!?!?
I think real estate bubble deflates more like a stairway down.
A drop down. A recover. Another drop down, lower that the previous one. And so one.
The wave of lay-offs in construction and manufacturing just started. It will take time before it affects stock markets and real estate prices. We may have 2-3 months of flat real estate sales and prices. Maybe even a small spring rebound.
It will take 5 years to deflate this bubble.
Bob: some stairways are steeper then others, here is a interesting post from a thread on siliconinvestor:
"At this moment, reality is that all major builders have land coming out of their ears. (the following numbers are a month or two old and has not been updated based on more recent company guidances, all lots include owned and optioned)
Using 2006 deliveries to calculate yrs of supply is generous to the builders since none is predicting same level of deliveries for FY 07.
If the market absorption rate deteriorates from here, the builders would have no choice but to reduce inventory one way or another. With such huge supply overhang, price wars may be very bloody.
BZH
95,000 lots
18,000 2006 deliveries
5.3 yr supply
CTX
200,000 lots
37,000 2006 deliveries
5.39 supply
DHI
314,000
51,000 2006 deliveries
6.14 yrs supply
HOV
89,000 lots
15,700 deliveries
5.7 yr supply"
"Using 2006 deliveries to calculate yrs of supply is generous to the builders since none is predicting same level of deliveries for FY 07."
That may be the biggest understatement I've ever seen on this thread. Even an optimistic look at 2007 deliveries takes those 5-6 year supply numbers to 8-9 years. IMHO
If rates are falling then demand for money is falling.
Or supply is increasing as in supply of MBS buyers looking to pump out US greenbacks in exchange for US denominated debt to say 'stabilize' the greenback vs. their currency.
"In September, police in Madison, Wis., said Milo G. Chamberlain's blood-alcohol content was .425, which experts said normally is attainable only by those either dead or in a coma, but he was picked up, quite conscious, allegedly causing a disturbance at a Marathon gas station, where he reportedly got into a fight with a gas pump before being restrained by passersby. Police said Chamberlain responded to each of their questions only by rattling off strings of numbers of no particular pattern."
Milo should be a poster boy for the bull case.
My goodness who would have thunk something like that could ever happen in Madison Wisconsin? If I didn't know better & the elections over, I'd have guessed he's running for Mayor of Madison.[/sarcasm]
I always need to be careful though when I make comments like that - I married a cheesehead (though THANK GOD she wasn't a Badger fan - that in our part of the world would have constituted a 'mixed marriage' - frowned upon on both sides of the river).
And for those of you who KNOW cheeseheads, 'no' I didn't meet her laying on the floor under a table in some cheesy bar. She was more than able to get up just fine all by herself.
On a semi-serious note - I used to go over to Madison to see U Minnesota - U Wisconsin sporting events 'back in the day'.
Back then they were the only on-campus stadium in the Big Ten that served beer and as far as I could tell if you had ID proving you were George Washington, then you got served.
I always wore my Minnesota colors proudly and prominently and was a loud a boisterous fan. As a result of point (1) they sold beer and point (2) me the fan... I always wore a rain coat no matter what the weather or even if I was inside (say at a Badger-Gopher hockey game)...
dryfly:
your point is probably much closer to the truth. with $12.4T in consumer debt you would think debt service cost would eat much of the excess dollars and be puting some pressure on cost of funds but money continues to pour out into the streets looking for american debt junkies.
dryfly, as someone who knows perfectly well what the difference is between a cheesehead and a shthead (answer: the Wisconsin-Minnesota border), I say, Numen Lumen (since my diploma doesn't actually have "Fck 'em, Bucky!" on it). Having spent some of the best years of my life in Madison, I find nothing strange about people named Milo fighting with gas pumps, although I confess that back in my day the gas pumps usually won.
Could this just be a flurry of people unloading their I/O or Neg Am loans while the rates have dropped.
Any way to find out what the existing loan is?
current mortgage loan rate current mortgage loan rate current mortgage loan rate. estate florida loan real estate florida loan real estate florida loan real.