Mortgage and Housing at Seeking Alpha

• A Home Builder Delivers Home Price Appreciation Big-Time
  Stephen Rosenman submits:

  A home builder delivering an earnings and revenue beat on home price appreciation? In your wildest dreams? During the housing bust? In foreclosure U.S.A.? Standard Pacific Corp. (SPF) did just that.

  SPF earned 4 cents beating consensus 2 cents and sold $317 million of homes while the street expected $263 million. Their homes sold for an average $355,000 compared to last year's $302,000, an 18% increase. The beat was solely due to the California market in which homes sold for an average of $526,000, a whopping $123,000 climb over last year. (Perhaps, SPF may be bringing back the refrain, "wish they all could be California...")

  
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• Don't Count on Housing to Lead the U.S. Recovery
  Carnegie Endowment submits:

  The collapse of the U.S. housing market was a critical cause of the Great Recession and sustained growth in this sector is necessary for the stimulus-driven economic recovery to succeed. After improving in late 2009 and early 2010, the housing market appears to be weakening again following the expiration of the homebuyer tax credit. Despite very low mortgage rates and improved affordability, home sales and prices remain depressed amid high unemployment and a large inventory of vacant homes persists. Beyond policies geared toward stimulating aggregate demand, there is limited scope for additional measures to aid the housing sector. Therefore housing will likely continue to lag behind the recovery rather than lead it.

  Housing’s Aborted Recovery

  Major housing indicators—including housing starts and existing home sales—have returned to low levels after showing signs of life several months ago. Though housing starts rose a modest 18 percent from December 2009 through April 2010 as the homebuyer tax credit was expanded, they are now at their lowest level in eight months and about 75 percent off their 2006 peak following the credit’s expiration.

  
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• Message to Freddie Mac: We Tried This Once. It Didn't Work
  

  In Phoenix, Freddie Mac (FMCC.OB) moves to clear some inventory:

  FREDDIE MAC TO AUCTION OFF FORECLOSED PHOENIX HOUSES

  
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• Anticipating Future Shocks
  

  Initial Claims was reported as-expected at 457k; some observers tried to make much of the fact that the 4-week moving average fell to its lowest level in a while, but of course that’s because of the very low number recorded two weeks ago when the seasonal adjustments looked for an auto shutdown that didn’t happen.

  I guarantee that the 4-week moving average will jump the week after next (when that data falls out). After all, each week only adds 1 data point. It doesn’t matter how you smooth it: every week has the same informational content. Focusing on the 4-week moving average is a way of keeping one’s self from getting too excited about this week’s number, but the easier method is…don’t get too excited about one week’s number. Each data point is the result of an experiment, measuring an unknown (and unknowable) underlying reality. Each data point, or collection of data points, has more value when those numbers start to diverge from those suggested by your operating hypothesis, causing you to question or reject your thesis. In this case, the operating hypothesis that the underlying rate of Initial Claims is approximately stagnant at roughly 460k per week is not threatened by this week’s 457k number, nor by the 464k number last week, nor by the 452.5k 4-week moving average. The jobs picture is the same as it has been: tepid.

  
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• U.S.-Canada Housing Mash-Up
  Sold At The Top submits:

  A chart has been making its way around the econo-blogesphere recently (hat tip TMTGM, Paul Kedrosky and Simple Financial Analysis) that matches up the trend in Canadian versus US home prices that, at first glance, provokes a sense that Canada is steadily moving closer to a bubble crescendo much like that of the US.

  The original plot shows the S&P/Case-Shiller Composite-20 and the Teranet/National Bank of Canada Composite-6 indices re-based to a value of 100 at January 2000 with the latest value seeing the Canadian index within a stone’s throw of the peak level reached by the S&P/Case Shiller in 2006.

  
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• Housing Bubble Will Not Be Reblown; Foreclosures Increase in 154 of 206 Metro Areas With Population Over 200,000
  Michael Shedlock submits:

  It's been one hell of a non-recovery in housing, smack in the face of now-expiring $8,000 home tax credits that have proven to be as stimulative and futile as attacking fire ants with a BB-Gun.
  
  Please consider Foreclosure Filings Rise in 75% of U.S. Metro Areas

  
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• U.S. Housing Market: A Striking Illustration of Animal Spirits
  Erwan Mahe submits:

  I would like to take advantage of the relatively calmer market situation to return to a topic dear to my heart, Animals Spirits, as coined by John Maynard Keynes in his 1936 work, The General Theory of Employment Interest and Money (p.161-162):

  Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits - a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities.

  
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• Housing's Poor Performance in June
  Zacks.com submits:

  After May hit a 47-year low in U.S. home sales, a somewhat recovered June came second. As compared with the previous month’s figures, home sales jumped 23.6% to a seasonally adjusted annual rate of 330,000 units in June from 267,000 units in May. Though the percentage increase in sales over the previous month was the highest in the last 30 years, June’s performance in absolute terms was not up to the mark, given that the previous month had experienced a historic decline of 36.7%.

  On the other hand, sales of existing homes, which constitute a significant proportion of the total U.S. housing market, faced a 5.1% decline to a seasonally adjusted annual rate of 537,000 units from 566,000 units in the previous month. This created a downward pressure on total home sales in the U.S, pushing it down to its lowest level in the last 42 years.

  
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• Cash Out Refinances ... No Longer the 'Cool' Option
  Trader Mark submits:

  I wonder if this represents a "new attitude" towards debt OR the fact that so many Americans are now underwater they no longer can do cash out refinancing to support their spending habits. Gun to head, I think it's a little of both. Whatever the reason, this is a long term positive but a near term blow to consumerism in Cramerica (70% of the economy) since cash out refinance was a hallmark of the "boom" mid-decade since wages in the private sector are faltering, inflation adjusted.

  Then again, 7M households are not even bothering to make payments on their houses at all while living "mortgage free," and so have graduated from old school house ATM spending (2003-2007) to the new and improved paradigm (2009-2014?). [Jun 2, 2010: (Even More) Anecdotal Benefits of Strategic Default]

  
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• Another Projection: 20% Additional Decline for Housing
  John Lounsbury submits:

  Barry Ritholtz provides the following chart, originally from the New York Times, but updated for The Big Picture by Steve Barry.

  For larger image, click here.
  

  
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