Home Spun

August/22/2009 8:49AM
Write Comment
Please follow and like us:

The stock market went up Friday on news that the US housing market may have made a turnaround. This is very good news. Is it reliable, or are we being spun with the statistics?

Another 500,000 plus hit the unemployment rolls this week. The foreclosure problems are blamed on unemployment. When families are out of work they can’t make the mortgage payments regardless of how much relief the mortgage holders or government can afford to give.

The statistics that raised the stock market were the sales of houses in July. Compared to June it was a 7.2% increase. Seasonally adjusted to 5.24 million units. Nice trend. Good enough to move the Dow up 1.7% for the day.

Foreclosure sales accounted for 31% of July sales. Also, new buyers are working to get the $8,000 tax credit which will expire Nov. 30 unless it is extended. Surprise, surprise, Chris Dodd has introduced legislation to not only extend it, but to increase it to $15,000 and make it available to all home buyers, not just first-timers. How many billions will this cost taxpayers? Will you have to crush your rental home, like cash for clunkers? These are the distortions that make statistics hard to interpret. Is it getting better or are houses being sold on short sales and foreclosures just to end the pain? How much does the government incentive distort the market?

One in ten mortgages in the US are at least one payment late. And, the problem is hitting prime mortgages, not sub prime. Prime loans are 65% all U.S. mortgages and they hit 32% of foreclosures in the April thru June period. Forty-one states show a rise in the foreclosure rate for prime mortgages in the second quarter.

Nearly 576,000 new unemployment claims last week ,with that number expected to go higher next week, means more mortgage problems down the road.

Is the housing upturn real or more smoke and mirrors to be followed by more bad news? I can’t pretend to make sense of this complex question, I just see that there is always more to every issue than one news article will address.

Please follow and like us:

Other Articles You Might Enjoy:

Leave a Reply