"The buyers who left the market in the latest round are typical first-time buyers," says one market watcher, "but people who continue to stay in the market (are) people ... buying higher-priced homes."
It's been a while since I've sensed quite this much doom among the folks obsessed with housing (one told me simply, "You're going to be very busy!"), but July existing home sales are unquestionably the product of a perfect storm.
Month after month, officials at the Treasury Department and the Department of Housing and Urban Development have to report lackluster statistics on the U.S. administration's mortgage bailout—and try to find something positive to say about them.
There's no question that the home buyer tax credit, which expired at the end of April, pulled home buying demand forward and thus created an inevitable drop-off afterward. It would be wrong, however, to blame the current lull in home buying/selling entirely on the tax credit hangover.
With home prices way down and mortgage interest rates hovering near record lows, you would think more buyers would get off the fence and sign a contract, but continued weak consumer sentiment is hold them back.
In response to criticism by many in Congress that it should have added GSE reform to the financial reform bill, the Obama administration has repeatedly said the housing and mortgage markets are simply too fragile right now to weather the inevitable storm that debate would entail.
If we know exactly how much shadow inventory of foreclosed properties will come to market, and we know the general demand, then we can get an idea of how much pain there is ahead in the still-fragile housing recovery.
We knew it was coming, as it was part of the recently signed financial reform bill, but today the Obama Administration announced it would be sending another $1 billion to unemployed borrowers to help them pay their mortgages.
We've been sitting around record lows on the 30-year fixed for many many months now, and while the refinance market has certainly seen a boost, the home purchase market has not.
I have been told over and over by Administration officials that there will be no big news announcement at the summit. No mandate that the government will suddenly infuse every troubled borrower's home with palatable equity.
