The US housing report remains grim as the release Friday by The Dept. of Commerce indicated new home sales declined 9.0% in November to an annualized rate of 647,000 units. That level marked a 12-year low and was well below the consensus estimate which had been guesstimated at 715,000. Treasuries rallied on the report with the 10-year note jumping a point and bringing its yield down to 4.07%.
The housing report is not good news for the US economy and should be taken as a warning that a 2008 recession is probably in the cards.
On Friday as you might expect the housing news weighed heavily on the home building stocks which comprised today’s worst-performing industry group (-3.2%). The thrifts & mortgage group (-3.0%) followed close behind in an association trade that was tied to a belief that demand for mortgages will remain depressed in 2008 along with the housing market.
Do not expect a soft landing in the housing market or for the US economy. 2008 will likely be a very tough year with a number of major homebuilders filling for bankrupcy protection.
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The National Association of Home Builders (NAHB) makes rosy projections for the 2008 housing market that keeps it up with the National Association of Realtors (NAR) optimistic forecasts. If only wishing would make it so elephants would be flying about.
I suppose both of these organizations have enough money left to pay for the type of forecasts that they like. Good luck to them.
The following is from the NAHB newsletter. 2008 looks to me to be shaping up as a year of disaster but, hey, I could always be wrong. And so could the NAHB and the NAR as they peek through their rose colored glasses.
=============== NAHB newsletter ==============
A plan announced last week by President Bush to limit foreclosures by working with key mortgage lenders and investment firms to freeze interest rates for five years on certain subprime mortgages will help set the stage for the industry recovery that is expected to materialize next year.
“The Administration’s plan to help struggling borrowers stay in their homes is one of several steps that can help stabilize the housing market and reassure consumers and investors in the mortgage market,” said NAHB President Brian Catalde, a home builder from El Segundo, Calif. “We applaud this action and urge Congress to follow up quickly on pending legislation that would provide additional help in easing the credit crunch and restoring confidence in the marketplace.”
Specifically, Catalde called on Congress to:
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You can still find a mortgage at good rates. Just compare your mortgage to what is available in the market place and see.
A good place to start and probably finish in your search for a home mortgage at good rates and terms is LendingTree Mortgage Loans
Don’t be discouraged about what you may read about the housing market. Everyone must live somewhere. For those who have decent credit now is a good time to find a home at a good price as well as a great mortgage. You can compare a mortgage to that offered by several lenders very easily at the same time to insure that you get the best mortgage deal.
Find a mortgage and compare that mortgage to other offers before you lock in. It’s a smart way to go.
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