OT:
Was anyone able to see my link at the beginning of the second page of the last thread?
It is not showing up on my screen but if I go to edit the comment; I can see it.
Paging KCOOP.

Any real estate market in the U.S. of A. that is beholden upon all-cash buyers to sustain itself, ain't much of a market.

Let's do a little experiment...

Mentally strip away everything that props up our real estate and financial markets, as in a trapeze artist plying his trade, without a net.

How's it look?

If refinancing went up even as the fixed rate went up - does that suggest that people are refinancing even at higher rates just so that they can take some money out. The HELOC window has closed for them?

So, the housing market is just another cash for clunkers program?

Cash purchases with federal subsidies propping up a market whose fundamentals are in fact much worse...

From end of last thread...

sillythings (profile) wrote (in reply to...) on Wed, 8/26/2009 - 9:08 am

Also, this stabilization is also a very good sign for the assets on banks' balance sheet.

Now I haven't seen too many posts from sillythings, but I'm thinking they are a relitter. Basically, this could all be boiled down to "buy now or be priced out forever". Have we really come full circle on this whole fiasco so quickly? Sad, just sad.

Also, if you are going to qualify your supporting arguments, you should likewise qualify your conclusion. "may have bottomed" is not the same as "most likely bottomed"

Also, CR just posted weekly MBA statistics that seem to indicate that there is a disconnect between the "surge" in existing home purchases and the amount of purchase mortgages being financed. As others have noted, a market that is now largely reliant on distressed sales, FTHB credits, and cash buyers is probably not a healthy market.

So thanks for your well-intentioned post that I'm sure was meant to protect the best interests of all the readers here at CR. But for now, I think I'll happily continue to rent and wait to see what happens. Based on the number of homes that are sitting on the market in our target geography and home type - I'm pretty sure prices will continue to come down.

@crazyv: "If refinancing went up even as the fixed rate went up"

... because people are trying to lock in their new payment before rates go up further. [edit: meant to end in ?]

We're considering a refi here, but we want to be sure prices have bottomed first, because we'll have to put in a lot of cash to return to 20% equity, and if prices are going to keep falling we might prefer to walk away. But economically, if we're going to stay in the home, paying off the mortgage is one of the best "interest rates" available.

What's so hard about boiling it down pretty simply to a supply vs. demand economy, vs. what we have now?

p.s.

I have one of the cheap Chinese crystal balls, and it only foretells events a fortnight out.

Close friend locked in a 30 yr, fixed with BofA last week at 4.875% Not sure what he paid in points, if any.

So I wasn't surprised to see the refi index had increased so much. I think a lot of people were waiting to lock at 5% or less.

If we're going to have an immaculate recovery in the economy, stock and housing markets; whereby there is never any consequence for our leveraging up the Fed's balance sheet and National Debt; then why are people concerned about higher interest rates? I'm sure the 10 yr will be in the mid 3s for the rest of our "they lived happily ever after" existences.

Wow. That's beautiful.

Seems to me that you are pretty unusual - have the ability to put in money to get to the 20% equity level, have an existing rate high enough to justify the increased investment and are more driven by a call on home prices rather than interest rates.

I suppose that there is a case to be made for a lot of people waiting on the side lines and the rise in refinancing is driven by them fearing that they are missing out on the boat. My recollection from past data is that we have seen refinancing increase when rates fall not when they rise.

BTW I agree with you about paying down the mortgage. The worst advice ever given to the American public was the idea of the "tax deduction on a mortgage". Paying off the mortgage (particularly if you have a lot of equity in it) is the closest thing to a risk free investment you are going to find. During the stock market I was unable to convince many friends that having a mortgage and owning stocks was the equivalent of purchasing stocks on margin.

The recovery® is going to kill off more homebuilders than the crash did....

Homebuilders Buying Land After Three Years of Cutting Inventory

Here's one....

On employment:
.
EMRATIO - continuing declines at a historic pace
energyecon: EMRATIO - 3 Mo MA YoY Decline - Continued Uncharted Territory
.
U-6 Unemployment - will climb and remain high for an extended period of time
energyecon: U-6 Unemployment Stats Revisited
.
UE Benefits Exhaustion Rate - set to decline while the number of 'exhaustees' is monotonically increasing
energyecon: UI Exhaustion Rate - Declines As Monthly Total Climbs

Yes, but I can't think of any that were publicly traded.

$10k is what a Smart car costs, but here on the left coast, you'd need to pony up a couple of Ferraris worth of greenbacks to buy a shack.

Recession over, Dallas Fed chief says

Skyin' 'em on that news.

I do not think that word means what you think it means...

I just received my estimated property tax bill this week, my home assessment went from 188K to 156K, that's inflationary, right?

Heyas CK,

Only for the taxing municipality...

"My recollection from past data is that we have seen refinancing increase when rates fall not when they rise."

========

That's exactly true. The last refi wave followed the Fed tightening from Greenspan's 1% FFR. The difference between then and now, was back in 2004-2005, exotic mortgages allowed home prices to go up in spite of higher mortgage rates.

This time around, I'm not sure we have the exotic mortgage system to support home prices IF rates rise.

Mommy, can come out and play?

July New Home Sales: 433K, up 9.6% from June, vs. consensus of 390K (pdf)

Yep, looks like he is just waking up for the day.

ummm...who does he mean by "us"?
Mortgage applications rise as refinancing demand jumps
"Right now the market has investors taking advantage of the great deals out there, mostly distressed properties in foreclosure or selling as short sales and first-time home buyers who are taking advantage of the first-time home buyers tax credit," Gillespie said.

"If that tax credit expires the end of November then the real estate market recovery will probably stall," he said.

Gillespie said what is truly needed is a $15,000 tax credit for all buyers of primary residences for a period of one year with no income caps so all levels of buyers have an incentive to get back into the market.

"A $15,000 tax credit will go a long way to helping us out of our economic situation today," he said.
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This time around, I'm not sure we have the exotic mortgage system to support home prices IF rates rise.

I'm going to correct myself. We do have exotic mortgages again, thank you FHA.

New Home Sales Increase in July

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, slipped 0.3 percent in July. Analysts polled by Reuters had expected core capital goods to increase 1 percent.

I don't know why anyone would buy new capital equipment considering the used market right now - well let me change that I do know why they would buy new - because some of the builders are giving them away to move inventory - but if you can't get a deal like that buy used - there is an ocean of used capital equipment floating around - primarily from the collapse of the auto sector.

Back to your regularly scheduled ...