Floyd Norris of the New York Times accuses Treasury Secretary Henry Paulson of "whistling past the graveyard"- and he has a point:
It is natural for a government official to look for signs things are getting better. So we should not be surprised that Treasury Secretary Henry Paulson yesterday pointed to the few signs there are of improvement in the housing market.
I’ve done my share of looking for signs of such improvement. At some point there has to be a bottom, but it is not easy to find evidence that the housing market is improving. One statistic he cited particularly struck me as whistling past the graveyard:
“We are working through the excess new home inventory – the inventory of new single family homes is down 21 percent from its 2006 peak.”
Apparently "down" is in the eye of the beholder:
The statistic he relied upon includes new homes that builders are offering for sale even though construction has not even begun. Those homes are typically in new subdivisions, and there are not very many of them these days. The number of unstarted new homes being offered is down 36 percent since June 2006, the month the overall figure he points to hit its peak. Part of that decline came because builders dropped plans to build, not because buyers appeared.
The number of partially completed new homes being offered is down 40 percent. What sales are being made are in the more desirable developments, and even there prices must be cut to make sales. (One California builder was offering a buy one, get one free sale on new homes.)
The inventory of new homes that have been completed and are available for sale is up 35 percent. In June 2006, there were 135,000 such homes. This May, the latest figure available, there were 182,000 such homes.
And the median age of those completed but unsold homes has gone up 136 percent over that period, from 3.6 months to 8.5 months. That later figure is the highest since the government started keeping that statistic. Some of those homes are in subdivisions where foreclosures are already climbing, and may be hard to unload at any price.
Don’t look for that inventory to be disappearing any time soon.
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twist,
this has nothing to do with this post, but I just heard about it.
apparently, as of Aug 1st, people will have to wait 4 years post bankruptcy before they can qualify for a new mortgage from Fannie Mae.
I’m sure Freddie Mac will have to follow suit.
http://creditboards.com/forums/index.php?showtopic=348191&st=0&gopid=3225508&#entry3225508
Diana-
I’m not surprised, although at some point they are going to have to do something to widen the pool of borrowers, not narrow them if inventory is going to ever have a dent in it.
Have you seen a link on Fannie’s policy yet?
No, I’m sure they must have just notified the brokers since at least 1 broker hadn’t heard it yet. & that was the 1st time anyone corrected the claim that it was only 2 yrs post-BK to get approved.
usually we get asked that question once a week, so the notification must be new.
You’re right- it must be hot off the press.
I just checked Broker’s Outpost- those guys can usually be counted on for having the links before everyone- but I don’t see anything yet.
twist -
I did a bit of digging and it seems that such things are normally placed in Fannie’s “2008 Lender Announcements and Letters”. There seems to be some relevant stuff in “Bankruptcy, Foreclosure, and Conversion of Principal Residence Policy Changes; and Revised Property Value Representation and Warranty Requirements”, Ann. 08-16, June 25, 2008.
There are additional things that look like they may be relevant.
DianaK (#1) -
cedski’s post #3 from your link appears to be text taken from Fannie’s Ann. 08-16 so you can click on the link above and read the original
To help put this in context, here’s a Tanta post from three months ago commenting on the earlier tightening in Fannie’s Ann. 08-08. The link there is how I found the newer 08-16.
“Fannie Mae Tightens Guidelines Again”, by Tanta, Calculated Risk, April 2, 2008.
Twist also wrote on related issues in her post “Fannie Mae: Building The Underwater Mortgages Of Tomorrow” (May 19, 2008).
John [aka Mr. Universe]
You did it again. Thank you!
Igor is saying “collude”, but I think “collaborate” is the better term. : )
Four years is a joke. It should be more like 8 to 10 years. Heck, I have already been waiting 3 1/2 years for a mortgage because they are too high. Punish the responsible and reward the irresponsible.
Igor’s word “apathy”