Saturday, January 21, 2012

Housing is not improving at all entering 2012

Contrary to manipulated government and NAR reports, housing numbers are not improving by any real sense in every area of the industry.  Going into 2012, the number of housing starts, home sales, and writedowns still remain close to record lows of the last 60 years.

Residential Write Downs: This is resurfacing for the umpteenth time. Today’s version came from HUD secretary Shaun Donovan (via Reuters). A rumored settlement involving $20-25 billion dollars in relief to distressed homeowners from banks involved with robosigning (BAC, WFC, C, JPM, ALLY etc.). The settlement might kick a $20,000 reduction for one million borrowers who are underwater.

New Home Starts: Total housing starts fell 4.1% in December to an annual rate of 657,000, reflecting a 20.4% decline in construction of multi-family units and a 4.4% increase in single-family starts.

Remodeling Moves Higher: “People are remodeling instead of moving” said David Crowe, chief economist of the painfully obvious at the National Association of Home Builders. The key to this are the huge number of current homeowners who either are unable to sell their currents homes, or if they do, no longer will qualify for a new mortgage, or lack a 15-25% down payment for another purchase in order to move.

The bottom line remains: Housing is a dark spot in the economy, and the regular bottom calling we hear is best ignored. One day, housing will once again begin contributing to US economy, but until we see higher Employment and greater household formation, that time is off in the future. -

This also doesn't take into account the new foreclosures that are expected to hit the markets in 2012 after local and federal judges overturned the MERS lawsuits and rights of banks to foreclose when they don't hold the note.


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