CR, do you remember what percantage of total loans are refinancings? For the graph where they differentiate between appraisals for refis and sales, it would be interesting to know how far off the mark are the refi appraisals, but that would depend on the ratio of refis to the total number of loans. I looked through the report but couldn't find it.
If half are refis, than the appraisals for refis are inflated by 4%, if a third are refis, it's 6%.
BTW, I noticed in the jump of unemployment claims, most of the states showing the largest jumps cited contruction job losses.
The CME housing futures are showing that housing prices across the country are down 4 to 8% from today into November 2007. These markets, usually traded by institutional and sophisticated investors, are regulated futures and options - real money (about $300 million of traded futures and options since May 2006) taking positions that settle against the S&P/Case-Shiller Indices. Having a look at these markets will certainly present where professional traders see the next year of housing prices are going.
Of note is the disconnect between OFHEO and S&P/Case-Shiller Index values from 2q06 to 3q06 (S&P/CSI showed steeper drops in general). With OFHEO putting a ceiling in at $417k for mortgages, the higher end of the market is not getting representation.
Tim Iacono does his usual great job adding clarity, this time to the OFHEO 3rd qtr. report with, "The Difficulty in Assessing Changes to Home Prices" (see link):
OF NOTE: "... only Fannie Mae and Freddie Mac mortgage transactions are included, meaning that only conforming, conventional mortgages under $417,000 are used in determining the price trends."
"The price trends are skewed due to the use of appraised values for refinancings which are included along with actual home sales to determine the overall price index."
"the national home improvement craze of recent years is not factored into the data in any way, meaning that some portion of the increase in home price should be attributed to money spent on home improvements rather than in the appreciation of the underlying asset."
"The OFHEO data also omits the one-sixth of total home sales that are new construction, a valuable data point when determining overall price trends as can be seen clearly in the next section."
CR, do you remember what percantage of total loans are refinancings? For the graph where they differentiate between appraisals for refis and sales, it would be interesting to know how far off the mark are the refi appraisals, but that would depend on the ratio of refis to the total number of loans. I looked through the report but couldn't find it.
If half are refis, than the appraisals for refis are inflated by 4%, if a third are refis, it's 6%.
BTW, I noticed in the jump of unemployment claims, most of the states showing the largest jumps cited contruction job losses.
The HPI graph makes the classical head'n'shoulders pattern right there. The trend has reversed
The CME housing futures are showing that housing prices across the country are down 4 to 8% from today into November 2007. These markets, usually traded by institutional and sophisticated investors, are regulated futures and options - real money (about $300 million of traded futures and options since May 2006) taking positions that settle against the S&P/Case-Shiller Indices. Having a look at these markets will certainly present where professional traders see the next year of housing prices are going.
Of note is the disconnect between OFHEO and S&P/Case-Shiller Index values from 2q06 to 3q06 (S&P/CSI showed steeper drops in general). With OFHEO putting a ceiling in at $417k for mortgages, the higher end of the market is not getting representation.
Oh, man is that a spooky looking parabolic chart. Can we say "regression below the mean", boys and girls?
Tim Iacono does his usual great job adding clarity, this time to the OFHEO 3rd qtr. report with, "The Difficulty in Assessing Changes to Home Prices" (see link):
OF NOTE: "... only Fannie Mae and Freddie Mac mortgage transactions are included, meaning that only conforming, conventional mortgages under $417,000 are used in determining the price trends."
"The price trends are skewed due to the use of appraised values for refinancings which are included along with actual home sales to determine the overall price index."
"the national home improvement craze of recent years is not factored into the data in any way, meaning that some portion of the increase in home price should be attributed to money spent on home improvements rather than in the appreciation of the underlying asset."
"The OFHEO data also omits the one-sixth of total home sales that are new construction, a valuable data point when determining overall price trends as can be seen clearly in the next section."
The Mess That Greenspan Made: Friday Lite