Archive for the ‘Housing Market’ Category

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Home Sales Increase by a Surprising Amount During April 2010: Sign of Economic Recovery?

Sunday, April 11th, 2010
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The home market of the United States has suffered greatly in the past few years. Foreclosures are at epic levels, and banks have been falling like flies as more and more of their homeowners lose their homes. It has been a serious situation and many investors are hoping that the bad times are in the past and better times for homeowners and banks are ahead.

The home market in 2008 and 2009 was nothing short of awful. It was a horrible time to be investing in real estate and it was a horrible time to be a homeowner. Millions of people were losing their homes and the purchase of homes was down to its lowest levels in decades. Many investors were worried about just how low the real estate market was going to go, but it appears that things may be improving in 2010 and that is good news to many homeowners and real estate investors.

Home Sales are Improving

Pending home sales in the United States went up by just over eight percent in February, which is making some investors think that the housing market is improving thanks to the tax credit created by the government to help spur home buying. According to the National Association of Realtors, pending home sales rose from a 90.2 reading in January to 97.6 in February. Real estate agents feel that this is the sign of a second surge in home sales coming thanks to the home-buyer tax credit. The reading indicator is based on contracts that have been signed to purchase homes, but is not a representation of the finalization of the purchases. This usually comes two months after signing the contract.

Pending home sales in February 2010 were 17.3 percent higher than they were in 2009, when the index for February was only 83.2.

The tax credit offered by the government is aimed to revive the housing sector by giving credits to individuals buying their first homes, but this tax credit only lasts until April 30.

The increase in home sales was a big surprise to experts who were expecting a slip due to the big winter storms that had hit the country during that month.

Will the upward trend continue?

Will this continue? Well, the real test will be to see if things continue to improve in May, after the tax credit has expired. If home sales continue to increase and foreclosures go down, then there is a good chance that the housing market will keep recovering. Many experts in the United States hope the housing market recovers like Canada’s which has seen huge growth for a year now, which has helped to lift up the entire economy of the northern neighbor to the United States.

The housing market continues to improve and many experts hope that this stays the case for months to come. With the tax credit and increases in February, only time will tell if things improve for the American housing market.

Further Reading:

Rise & Fall of US Economy

TradeMonster Reviews

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Posted in 2009 Recession, Economy, Housing Market, Uncategorized | No Comments »

Credit Woes Ease and Banks Borrow Less from Federal Reserve

Monday, April 5th, 2010
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The Federal Reserve’s emergency lending program has seen less money borrowed from it in the past week as banks got less money on the easing of credit problems in the country. This spells good news for the economy and has many investors thinking that better times may be here sooner.

Banks Have to Borrow Less = more Liquidity in the market

Banks over this past week borrowed less money from the Federal Reserve’s emergency lending program and that has many investors thinking that credit problems may be lessening for the country. According to the Federal Reserve, banks borrowed $7.66 billion last week, which is a decrease of $10.75 billion from the previous week. A $3 billion drop is pretty significant, and is a sign of a better economy ahead.

Financial Situation in US improves

As the financial situation of the country has improved, banks have been issuing fewer discount loans. During the fall of 2008, when the financial crisis was at its worst, daily borrowing by backs was topping $110 billion. Many banks found that their typical sources of credit were completely frozen, which made it very difficult for them to be able issue credit to their customers.

One reason that the emergency loan program from the Federal Reserve is so popular is that banks pay a miniscule .75 percent of interest on the loans.

As a result of less borrowing, the Federal Reserve has been ending various support programs for the economy. Last week, the Federal Reserve shut down an economic-support program that provided lowered mortgage rates. Another program that is shutting down with the Federal Reserve is the program that would help consumers and small businesses get lending during the financial crisis. The program was called the Term Asset-Backed Securities Loan Facility, and it ended on Wednesday. During the past week, the use of the program pushed about $47.3 billion.

The Federal Reserve will keep the program that helps the commercial real estate securities market will not end until the end of June.

Economists are looking at these decisions from the Federal Reserve as reason as to why the economy is doing better. Many experts and investors are therefore getting more confidence in the market and that will help the market in the coming months. With more programs shutting down because their use has been fulfilled, it will be a test to see if banks, consumers and businesses can survive without the economic safety net that the Federal Reserve is providing.

The Federal Reserve announced that it was ending the loan program for banks this week as the amount of borrowing dipped to below 10 percent of what was being borrowed in the fall of 2008. Many consumers and banks are on more sure footing now thanks to the work of the Federal Reserve to keep the American economy going. Hopefully we will continue to see improvement in the market as time goes on in the coming months.

Further Reading:

Citibank Future: What is in store for CitiBank

CIT Bankruptcy story

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Posted in 2009 Recession, Credit Card Industry, Economy, Finance Sector, Housing Market, Uncategorized | No Comments »

The Fannie Mae Situation – FNM, is it a good time to buy

Sunday, April 4th, 2010
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One of the biggest news stories of the past few years was the near collapse of Fannie Mae, and the rescuing of the company by the government. Well, Fannie Mae is still in the news and February was not a good month for this iconic company in the United States. With all the good news about the economy recently, the Fannie Mae (NYSE: FNM) situation is making many worry about just how strong the economy truly is.

The largest provider of funding for U.S. home mortgages, Fannie Mae (NYSE: FNM), saw a big decrease in its investment portfolio in the month of February. In addition, the company took a second big hit with the announcement that the company had more delinquencies on its loans, which were happening at a much faster rate.

The Fannie Mae portfolio saw a decrease of 14.2 percent to $725.9 billion in February. This was a decrease of almost $10 billion from the January portfolio value of $735.2 billion. In addition, the year-to-date portfolio has decreased by 31.2 percent. The value of the portfolio in February 2009 was $784.7 billion, which is nearly $60 billion above what it is now.

Delinquencies for Fannie Mae have continued to increase as well in February, with single-family mortgages going delinquent at a rate of 5.52 percent. This is double what the delinquency rate was in 2009, when it stood at only 2.27 percent. Multi-family delinquencies also rose to .69 percent, which is almost three times what it was in 2009, when it stood at .27 percent.

In February, Fannie Mae’s mortgage portfolio increased by one percent, pushing the value to $3.230 trillion, with the year-to-date portfolio actually going down by two percent.

For the government, this has been bad news because the U.S. government is relying heavily on Fannie Mae and its sister company Freddie Mac to help stimulate the housing market of the United States by buying up mortgage loans, making financing easier and helping consumers keep from going into foreclosure.

In the fourth quarter of 2009, Fannie Mae lost $16.3 billion and the company is going to be requesting a $15.3 billion loan from the U.S. Treasury to keep the company from going into the red. This then means that more taxpayer money is needed to keep the company running, and not failing, as nearly happened a few years ago.

The housing market still has some distance to go in the United States if the state of Fannie Mae is any indication. The company had a very bad few months with delinquencies accelerating, portfolios shrinking and losses increasing. The U.S. government does not like to hear this and neither do investors, who have been hoping that a better housing market would help to bring up the entire economy as has already been happening for a year in Canada. Will Fannie Mae go under again? Well, it depends if taxpayers want to help out with another $15 billion.

Further Reading

Housing Market Future in USA

Zecco Reviews: Free Trading

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Posted in 2009 Recession, Economy, Finance Sector, Housing Market, Uncategorized, loans | 2 Comments »

US Stocks Fall On Economic Data in March 2010

Wednesday, March 24th, 2010
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Tough economic pressures around the world have put a strain on the American economy. After going up for several days last week, the indexes fell and the rise of oil prices was pushed down a bit. Is this a sign of troubles to come around the world that will hurt the American economy? Once AGAIN?

World Economy Seems to be Slipping Down

After a downgrade in the debt pressure of Portugal on the Euro, which pushed the U.S. dollar higher, and then caused oil to go down, it may be no surprise that major stock indexes were down as a result. The S&P 500 index fell by 71.4 points earlier this week due to the lowering of Portugal’s debt by one point to Double-A-Minus. Confidence in the Euro has fell as a result, which helped the dollar. The Euro fell to a 10-month low against the U.S. dollar. The strong U.S. dollar at this moment pushed the Canadian Dollar, which was close to par, down almost one cent to 97.64 cents US.

For crude oil, the May crude contract on the New York Mercantile Exchange fell by $1.16 to $80.75, which hurt the energy sector by pushing it down by .57 percent. Mining companies also suffered, with the gold sector falling by 2.42 percent total.

In terms of the Dow Jones, it lost 50 points and fell to 10,838, with the NASDAQ falling by 14.04 points as well. Durable goods orders in the United States grew by .5 percent, which is below the .7 percent growth that was expected. One good point about this rise in goods orders is that there have been three straight months with rises in orders.

graph showing economic slow down in 2010

Home Sales Went down in February 2010

Additionally, the U.S. Commerce Department reported that home sales fell by over two percent last month. This is not good considering many economists were forecasting a rise of 1.9 percent.

The world is still battling through The Great Recession, and with Portugal having problems with its credit rating, there seems to be no real end in sight yet. The United States economy appeared to be growing earlier this month, but once again things have fallen as a result of the troubles around the world. With the Euro struggling, the dollar is doing better but that does not mean that the American economy is going to be improving any time soon.

What Makes a Stagnant Economy

Rise & Fall of American Dream

Zecco Reviews: Free Online Stock Trading

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Posted in 2009 Recession, Aftermath of Stimulus plans, Economy, Housing Market | No Comments »

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