Comments in the earnings reports from homebuilders Toll and HOV
highlight the signs of stability but also still the fragility in
housing. Toll’s ceo said “with interest rates near historic lows and
housing affordability near historic highs, it appears that some buyers
are beginning to re-enter the new home market.” HOV’s ceo echoed
something similar but also laid out his concerns that “the expiration of
the $8,000 federal tax credit in November this year, the depletion of
the state funds allocated for the $10,000 CA state tax credit for new
home buyers and the potential increase in existing home listings due to
another wave of foreclosures as the recent moratoriums on foreclosures
have ended could have a dampening effect on our future contract pace.” I
say add to this, mortgage rates at 4 mo highs. The MBA said refi’s fell
24.1% to a 3 mo low but purchases rose 4.3% to a 2 mo high. ABC
confidence fell 2 pts to a 7 week low. With the bond market over the
past few weeks vehemently questioning the prudence of both monetary and
fiscal policy, Bernanke testifies on the economy at 10am before the
House Budget Committee. May ADP jobs report is expected to fall by 525k.

The ISM services index is expected to come in at 45 vs 43.7 in April.

II: Bulls 42.5 v 40.9 Bears 25.3 v 28.4, bears lowest since early Jan ’08

Category: MacroNotes

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

2 Responses to “Housing pluses and minuses”

  1. Onlooker from Troy says:

    To the desire that govt further subsidize the purchase of homes, I say, B.S.

    We’ve done enough harm by govt tinkering here. Huge misallocation of capital resulted. They’re just going to have to suffer the consequences of overbuilding and wait for the inventory overhang to be worked off. I have no sympathy for homebuilders (and the sleazy part of the mortgage industry that bloomed in the bubble). They got greedy and if they didn’t save from the good times to carry them through the inevitable bad times, that’s just too bad.

    Cry me a river.

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