Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Investing in Crypto Currencies With Both Eyes WIDE OPEN! - 25th Oct 21
Is Bitcoin a Better Inflation Hedge Than Gold? - 25th Oct 21
S&P 500 Stirs the Gold Pot - 25th Oct 21
Stock Market Against Bond Market Odds - 25th Oct 21
Inflation Consequences for the Stock Market, FED Balance Sheet - 24th Oct 21
To Be or Not to Be: How the Evergrande Crisis Can Affect Gold Price - 24th Oct 21
During a Market Mania, "no prudent professional is perceived to add value" - 24th Oct 21
Stock Market S&P500 Rallies Above $4400 – May Attempt To Advance To $4750~$4800 - 24th Oct 21
Inflation and the Crazy Crypto Markets - 23rd Oct 21
Easy PC Upgrades with Motherboard Combos - Overclockers UK Unboxing - MB, Memory and Ryzen 5600x CPU - 23rd Oct 21
Gold Mining Stocks Q3 2021 - 23rd Oct 21
Gold calmly continues cobbling its Handle, Miners lay in wait - 23rd Oct 21
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

U.S. Housing Market Wobbling without Tax Credit Crutch

Housing-Market / US Housing Jul 01, 2010 - 07:21 AM GMT

By: Money_Morning

Housing-Market

Best Financial Markets Analysis ArticleDon Miller writes: The housing market has struggled to rebuild since its 2007 collapse, and its recovery is on even shakier ground now that a tax credit for first-time homebuyers has expired.


Nearly one-third of all U.S. home sales in the first quarter involved properties that were in some stage of mortgage distress, according to RealtyTrac Inc.. And homes on the market that were in the process of foreclosure sold at an average discount of 27% in the first quarter, which does not bode well for new inventory coming onto the market.

"We're clearly creating more properties that will be sold at distressed prices than the market is absorbing," Rick Sharga, RealtyTrac's senior vice president for marketing, told Bloomberg News in an interview. "The discount will probably stay between 25% and 30% as lenders carefully manage the number of new foreclosure actions in order to avoid flooding the market."

A total of 232,959 homes sold in the first three months of the year had received a default or auction notice or were seized by banks, and there were more than 250,000 new bank seizures in the first quarter.

Home foreclosures set a record for the second straight month in May with increases in every state, as lenders stepped up property seizures. Bank repossessions climbed 44% from a year earlier and will probably set a record in the second quarter.

Bank-owned properties sold for an average 34% discount in the first quarter, up from 32% both in the previous quarter and a year earlier. REO's, as such properties are known, accounted for 19% of all U.S. home sales, up from almost 16% in the fourth quarter and down from 21% in the first quarter of 2009, RealtyTrac data show.

Distressed sales totaled more than 1.2 million in 2009, up 25% from 2008 and more than four-fold over 2007. Distressed property accounted for 29% of all sales last year, up from 23% in 2008 and 6% in 2007.

A "normal" market would show foreclosures accounting for less than 2% of sales, Sharga said.

Nevada had the highest proportion of distressed sales of any U.S. state, with 64% of all transactions involving properties in mortgage distress. California ranked second, with such sales accounting for 51% of all sales and Arizona was third at 50%.

Meanwhile, Congress so far has failed to approve an extension on the $8,000 tax credit for first-time homebuyers. The U.S. House of Representatives on Tuesday awarded extra time to hundreds of thousands who were trying to secure the credit, but passage in the Senate is still uncertain - despite the fact that Senate Democrats introduced a similar bill Tuesday.

The House passed by a vote of 409-5 a measure to extend the closing deadline to Sept. 30 for buyers who already met the April 30 deadline to have a signed contract.

Real estate agents say thousands of purchases may not be completed by Wednesday because settlement offices are slammed with buyers trying to close on transactions in order to receive the funds. Many are trying to take advantage of short sales, which are complicated deals to complete.

"Up to 180,000 homebuyers will now receive the tax credit they deserve, and our housing market will be strengthened as a result," House Speaker Nancy Pelosi said in a prepared statement after the lower chamber approved the measure.

Majority Leader Sen. Harry Reid, D-NV, said the measure "should be passed swiftly."

Even so, an extension would represent the end of the line for Congressional moves to breathe life into the moribund housing market. Mortgage applications plummeted 40% after the deadline to apply for the tax credit expired at the end of April, signaling buying activity could remain muted for the rest of the year.

At this point, it's hard to envision how the market can execute a turnaround anytime soon.

Unemployment continues to hover around 10% and over 6 million Americans lost jobs in the Great Recession.

About 7 million homeowners are behind on their mortgages, and that number is on the rise. The delinquency rate for mortgage loans on residential properties increased to 14% of all loans outstanding in the first three months of the year, according to the Mortgage Bankers Association (MBA).

Foreclosures are expected to climb to 4.5 million this year from 2.8 million in 2009, according to RealtyTrac.

"Ultimately, you're going to need job growth to see a sustainable recovery in housing," Scott Brown, chief economist at Raymond James & Assoc. Inc. (NYSE: RJF) in St. Petersburg, Florida, told Bloomberg.

Source : http://moneymorning.com/2010/06/30/housing-market-10/

Money Morning/The Money Map Report

©2010 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

anne
07 Jul 10, 02:53
Double Dip

Could the double dip be coming from the outside forces still?


Post Comment

Only logged in users are allowed to post comments. Register/ Log in