home sales: 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)

home sales: Housing Affordability, Mortgage Rates, And Home Sales - 07/03/09 01:21 AM
The NAR recently published their May Housing Affordability Index which showed that while affordability did drop from a record high 178.8 in April to 171.6 in May, it remains well above historic norms.
Prior to this year, the highest housing affordability index reading was 147.9 in 1973.  The first five months of 2009 the index has averaged 174.72.
To get some perspective on the current index for 2009 and the relationship to existing home sales, here is what the housing affordability index has looked like over the past couple of years according to the NAR:
Affordability Index / Mortgage Rates / Existing … (0 comments)

home sales: Jim Cramer's Housing Bottom Call?? - 06/04/09 03:34 AM
"Yeah, it's here."  Says CNBC's Jim Cramer as he calls a "bottom" to the housing markets despite home values plunging a near record -15.4% in April while there is still a 10.2 month supply of housing despite massive foreclosure moratoriums (Source: NAR).
Citing low, but rising, interest rates, the $8,000 first time home buyer tax credit, and record housing affordability, Jim Cramer is calling a "bottom" to the housing market.  But what Cramer is overlooking is that despite all of these "buying signs" and housing stimulus, home sales are still bouncing along multi-year lows.  Demand for real estate on a seasonally-adjusted basis  has not been impacted … (8 comments)

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