For the second time in a few days, a major index has shown that home prices rose in April.
First, we had the Federal Housing Finance Agency tell us that April home prices were up 0.8 percent for April. Next, the well-known Case-Shiller report also said prices rose in April, the first increase in eight months.
When will the real estate downturn end? According to a new study by RealtyTrac and Trulia, most Americans surveyed believe that a market which has been in the dumps since April 2007 is likely to remain depressed until 2014. That would mean a seven-year drought on the real estate front, something truly of biblical proportions.
What makes the study interesting is that questions asked in November 2010 were asked again in April 2011. The changing perception of the marketplace is apparent–the hope for a quick resolution of the housing crisis has now evolved into a belief that we will remain firmly stuck in slow gear, despite current mortgage rates which are near historic lows.
I’m up to my eyeballs everyday in the latest financial and economic news because it’s my job. That said, I wasn’t surprised at all when I read (and I have read it many times before) that many economists feel that the economy would be better off if policy makers stepped aside and let the natural functions of the market work themselves out:
Economists are getting more pessimistic about the strength of the U.S. recovery, but they don’t think policy makers should do anything more to support it, according to the latest Wall Street Journal forecasting survey.
“Low and slow”: The perfect strategy for cooking barbecue ribs, but far from ideal in terms of an economic situation. Unfortunately, “low and slow” is how our current economic recovery is playing out. Some of the latest economic reports that investors and analysts were hoping would thrust us toward a speedier rebound — June’s job report, home sales (to name a few) — haven’t delivered.
The one bright spot in our slogging economy is mortgage rates: Read the rest of this entry »
That’s the view of the president of the Federal Reserve Bank of NY:
The U.S. economy will likely see moderate growth in the second half of 2009, but the recovery will be considerably slower than usual, the president of the Federal Reserve Bank of New York said on Wednesday.
A modest recovery in housing activity and car sales, the impact of the fiscal stimulus and a sharp swing in the pace of inventory investment should give the economy a boost, William Dudley said in remarks prepared for delivery to the Association for a Better New York.
The Federal Open Market Committee (FOMC) will conclude its two-day meeting this afternoon. Immediately following the meeting the committee will release a short but telling statement which will summarize the Fed’s intended actions, decisions, and opinions in terms of the economy and our path to recovery.
First off, the overall consensus is that the Fed wants to keep interest rates low. The target for the Fed funds rate is widely expected to remain between 0-0.25%. Mortgage rates are also expected to remain in the range they have fluctuated in over the past several months. Joshua Zumbrun of Forbes.com reports that the Fed has already purchased $455 billion of mortgage-backed securities (MBS), and stands to purchase another $795 billion if they plan on sticking to their original goal of buying up $1.25 trillion. In six months the Fed has purchased an average of over $17 billion in MBS a week. At that pace the program should run at least through the end of the year: Read the rest of this entry »
HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.
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