Housing Recovery Is Looking A Lot Shakier Than Expected

[Cali_Democrat]

In other words, the re-inflation of the housing bubble isn't going as expected.

http://finance.yahoo.com/news/Housing-Recovery-Is-Looking-A-cnbc-1706073918.html?x=0&sec=topStories&pos=main&asset=&ccode=

The recent slump in housing is making some analysts uneasy about a recovery that many thought sustainable just a couple months ago and comes at a time when the Federal Reserve is nearing the end of a critical, year-long program to support the mortgage market.

"Housing is at a pivotal, ambiguous point," says Ted Gayer, co-director of Economic Studies at the Brookings Institution.

A spate of recent reports from home sales to mortgage activity has been starkly negative. And, even if some of it can be written off to seasonal patterns, namely weather, the weakness is not what what people expected with the extension and expansion of the government's homebuyer tax credit that jacked sales for several months last summer and fall.

New homes sales fell to a record low in January, extending a two-month slide; pending and existing home sales were down in December; homebuilder sentiment in January fell back to where it was last June, and mortgage applications have fallen three of the past four weeks,

Read more at link.

[Warpy]

1. There were two things driving the "recovery,"

speculators snapping up REO bargains, especially high rise condos in formerly attractive resort areas like Miami, and homeowners taking advantage of mortgage modifications. The former demand has been satisfied for now and the latter program has wound down.

In other words, there has been no recovery of the type that would put new families into their own homes. Banks are loath to lend to them and people who are not certain of the longevity of their jobs are loath to borrow over a period of 30 months, let alone 30 years.

In other words, there was no recovery, there is no recovery, and we're back to what is the new normal.

[FreakinDJ]

2. Banks undermining the Recovery Efforts

Nobody can afford to buy a home because no one can qualify for the loans

This is why Volker's recommendations for New Regulations need to be implemented like YESTERDAY

[xchrom]

5. +1

[xchrom]

3. Just sold my place -- got more than asking --

So hopefully I'll find a good deal for my next buy in about
a month or so.

But I really really hate how badly things are moving right now.

[jody]

4. HYPE can CHANGE such facts and perpetuate the notion of economic recovery. n/t

[taught_me_patience]

6. Watch the "temporary" $8,000 tax credit morph into a $16,000 tax credit

and become permanent. They will do anything to re-inflate the housing bubble.