000 first time home buyer tax credit: Mortgage Rates, Existing Home Sales, And The $1.25 Trillion Dollar Question - 08/23/09 08:50 AM
With existing home sales rebounding this past month to the fastest pace since the financial crisis made land-fall in September, it begs the question, was the Fed's monetary policy of purchasing $1.25 trillion in mortgage backed securities worth the cost?
To put this Fed monetary intervention into perspective, it was nearly the size of the TARP and the stimulus package...combined.  And yet despite this, it has not received much attention.  Part of the reason may be because it is not "tax-payer" money, it is new money that the Fed has printed.
The implications of the Fed's $1.25 trillion monetary policy is that rates … (1 comments)

000 first time home buyer tax credit: Let The $8,000 Credit Confusion Begin... - 05/30/09 02:19 AM
I wrote a blog yesterday detailing my concerns about the "new" monetized $8,000 first time home buyer tax credit and how not only will it not have any meaningful impact on demand, but it is likely to cause a lot of confusion as well, understandably.
And while we may need to wait several weeks to see if this is actually going to impact demand for real estate, it is safe to say that the confusion has already begun.
According to the letter from HUD detailing this provision, "Accordingly, the proceeds of the sale of the tax credit to FHA approved mortgagees, … (0 comments)

000 first time home buyer tax credit: Mortgage purchase applications indifferent to lower rates - 03/26/09 06:05 AM
The Mortgage Bankers Association released their weekly mortgage purchase application which showed that despite the average 30-year fixed rate mortgage plunging from 4.89% to 4.63% (the lowest on record for the survey since 1990), the seasonally adjusted purchase application index only increased 4.2% from 257.1 to 267.8. 
To give this 267.8 seasonally adjusted purchase index some context, during the week of November 26th of 2008 when the average 30-year fixed rate mortgage was 5.99%, the purchase index was 261.6.  In other words, despite the 30-year rate being nearly 1.4 points lower today than it was the last week of November of 2008, there is virtually … (2 comments)

000 first time home buyer tax credit: Mortgage purchase applications continue to face a headwind - 03/11/09 03:11 AM
Despite the 30-year fixed rate mortgage sinking below 5% to 4.96%, and despite housing affordability being at a record high, and despite an $8,000 first time home buyer tax credit, Americans continue to show very little interest in buying homes.
The Mortgage Bankers Association announced today that the mortgage purchase index still remains low at 253.3 despite rising 7.1% from last week.  To give this number some context, three weeks ago, before President Obama signed off on the $8,000 first time home buyer tax credit, the purchase index stood at 257.3.
What this means, is what I have thought initially, and that was that … (1 comments)

000 first time home buyer tax credit: Housing affordability reaches a new record high - 03/04/09 01:22 AM
The NAR is reporting that housing affordability as measured by mortgage rates, median income, and median home values, has reached a new record high as of January of 2009.
The composite index increased from 153.2 in December to 166.8 in January.  Historically, the highest affordability index was in 1973 when it was 147.9, the first year that the NAR began tracking this indicator.
In other words, in theory, never before has there been a better time to buy a home.  Yet despite this, existing home sales are the weakest they have been in 12 years and new home sales are the lowest … (2 comments)

000 first time home buyer tax credit: The homeownership predicament - 02/16/09 07:26 AM
The problem with Congress' stimulus and bailout efforts to increase homeownership rates through a new $8,000 tax credit while at the same time attempting to maintain the dream of homeowenrship by subsidizing mortgage payments is that they are overlooking a big part of the housing market, the non-owner occupied market.
According to the U.S. Census Bureau, in the second quarter of 2008 only 58% of the housing units in the United States are owner occupied.  In other words, approximately 42% of the homes in the United States are either held for investment, vacation, or are vacant.  Assuming you own the home you are living in, take a look … (2 comments)

000 first time home buyer tax credit: Congress is bringing a knife to a gun fight - 02/06/09 07:05 AM
If you've seen the movie the "Untouchables" with Sean Connery, you probably remember the line where he says something to the effect of "bringing a knife to a gun fight", only he uses a term that I won't repeat.
Well, that's exactly what Congress is doing with their proposed housing stimulus plan that is making its way through the Senate, they are bringing a knife to a gun fight and they have been now for nearly a year.  And that's why the housing market has and will continue to deteriorate.
The latest of Congress' efforts is to provide a 10% home-buyer … (7 comments)

Mark MacKenzie

Mark MacKenzie

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