Posted on 08/24/2007 7:42:17 AM PDT by Always Right
WASHINGTON (MarketWatch) -- Sales of new home increased 2.8% in July to a seasonally adjusted annual rate of 870,000 as the inventory of homes for sale dropped for a fourth straight month, the Commerce Department estimated Friday.
Sales were stronger than the 820,000 annualized pace expected by economists surveyed by MarketWatch. See Economic Calendar. In addition, sales in June were revised slightly higher.
Sales are down 10.2% compared with last July. Read the full report.
Stocks turned higher after the report was released. See Market Snapshot.
Inventories of unsold homes fell about 1% to 533,000, the fourth consecutive decline. At the July sales pace, the inventory represented 7.5 months' supply, down from 7.7 months in June. Inventories are down 7% since last July. The median sales price in July was $239,500, up 0.6% compared with a year earlier. The median sales price can be affected by the mix of homes sold from region to region and among different price points.
The data cover activity through the end of July, before the severe credit squeeze forced additional mortgage lenders out of business and made nonconforming mortgages, including jumbo mortgages, harder to obtain. Most economists expect home sales to fall further, at least temporarily, because of the credit crunch.
(Excerpt) Read more at marketwatch.com ...
Wonder why none of the local bubble heads posted this? They are so quick to post the bad news.
We’re dooooomed.
Who do you believe? People saying, "it looks as if...," "In 1987 it was just like...." "Economists all agree... ."
Or facts???????
This news, along with strong durable goods orders, continued low unemployment rates, equity markets within 5% of their 52-week highs, and inflation rates slightly higher than the Fed's comfort zone indicate that a rate cut may not be necessary next month.
We’re not dead yet.
So, wait until the arms reset in Oct thru Apr. Also thsi happened before August.
Vultures hate good news. It ruins their lunch.
Why wait? The Fed can act to preempt many of the problems that would otherwise arise from a credit crunch.
This is not the bottom. There is roughly 2 trillion dollars worth of 2 year and 3 year arms that are set to adjust is 2008/2009. Things will get worse before the get better IMO.
The Surge is Working and the Rats are in the Trap
Pray for W and Our Troops
I will say it again. This whole debacle is fear driven and based on little but raw emotion. And while it is true that perception can be reality as far as the consequences of that perception, eventually the real facts will emerge, as they now are and stability will return to the markets as we are beginning to see happen.
You are correct. We’ll see the bottom some 18 to 24 months after the Fed begins cutting the Fed Funds rate next month.
Sales of homes are cars month over month are a lot less telling than sales year over year... You mean more people bough houses in July during the summer than June when their kids were in school? *GASP*
Looks like bottom may have been hit, especially if the Fed comes through with the rate cut next month.
That is quite possible and would be good news.
Horrible news for the bubble heads though who seem gleeful at the prospects of massive bankruptcies and people losing their life's savings.
While they may or may not be wrong (im on the fence) but I dont see people being gleeful..
Had lunch with a buddy of mine yesterday. He went through a messy divorce last year, ended up filing Chapter 13 bankruptcy, so he could keep the house (he got it, she ran off with another guy).
His mortgage is with Countrywide. To this date - 12 months later - Countrywide STILL has not filed the paperwork to begin receiving payments from the trustee (FULL value mortgage payments, not partials). Countrywide’s behind about $20K by their own doing, doesn’t affect my buddy at all since he’s on top of his bankruptcy payments...
Maybe Countrywide’s problems are not just the market? I wonder how many other people out there have money just sitting for them to claim...
That is true. However, if the economy stays good, and interest rates don't shoot up, most of those borrowers aren't going to default.
ARM loans are often popular with younger home buyers which see relatively large growth in income in earlier years of their careers, and their incomes will likely grow much faster than their mortgage payments.
If the housing market is doing ok, many of those who are unable to afford their payments will be able to sell their homes rather than defaulting.
There was an unreasonably high amount of high risk loans that were made, and lenders are going to continue to pay the price for that. However, the market has already taken that into account to the point where investments that had only a relatively small exposure to such bad loans have taken big hits.
We are far from through this mess, but it looks like we are past the worst of it.
Thanx for sharing this.
While fear is a very powerful tool for the drive-by media, "subprime crisis" is pure smoke and mirrors as the maximum subprime foreclosures would be 1/2 of 1% of all mortgages cooked up in the last several years.
Those "subprime" loans were secured with property.
I'm neither an expert on mortgages nor the economy, but I'm always perplexed by the people who are always declaring doom whenever there's a downturn in the economy. They never say that things will be slightly down. They always predict complete and utter disaster with millions of Americans lining up for bread rations and a blanket.
The toothpaste is already out of the tube.
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