Housing Doom

This Bloomberg article showed up online about an hour ago:

U.S. Senator Charles Schumer and other members of a key banking committee said the federal government should spend “hundreds of millions of dollars” to bail out subprime mortgage borrowers facing foreclosure.

The money would go to non-profit community groups to help refinance mortgages homeowners can’t afford to repay, Democratic Senators Schumer of New York, Robert Menendez of New Jersey and Sherrod Brown of Ohio said today at a news conference in Washington.

“We are just making a general proposal here that the federal government step in and help refinance a lot of the homes in these areas that are now in delinquency who would be in foreclosure soon if nothing was done,” Schumer said.

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It’s the spin that would make Lereah proud.  Yesterday Jay Butler issued his monthly home sales report.  Butler is the director of Realty Studies at Arizona State University’s Polytechnic campus. Here’s his "succinctly" worded explanation of March sales:

March generally tends to be the first month that shows an improvement in a given year and the beginning of the resale season. With 5,385 sales, March did show some improvement over January (4,520 sales) and February (4,280 sales). Further, it was the strongest month since 5,685 were recorded in August 2006 and 5,040 sales in November. Thus, March showed all of the indicators of a traditional March and further supported the idea that the market has returned to its historical pattern. However, it was well below the 7,265 sales of March 2006 and 10,035 sales of March 2005, but comparable to the 5,340 sales of March 2002.

In other words, although sales are up 26% month-over-month MOM, [no big deal, this is a seasonal occurrence] they are DOWN 26% YOY for the worst March in five years.

While sales are tracking around 2002 levels, inventory is not. Total inventory was at 27,702 in March 2002. With over 50,000 in total listings at the end of March 2007, there were about 80% more properties on the market- which is going to make for a lot of disappointed sellers.

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