Pending Home Sales Tumble 16 Percent in November

Pending Home Sales Tumble 16 Percent in November
January 5, 2010, ABC News via Reuters

Pending sales of previously owned U.S. homes fell more than expected in November because of the end of a rush to beat the initial expiration of a popular tax credit, a survey showed on Tuesday. The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in November, dropped 16 percent to 96.0, after rising for nine straight months. Analysts polled by Reuters had forecast pending home sales, which lead existing home sales by one to two months, falling 2 percent in November after rising to 114.3 in October.

This Year’s Housing Crisis
January 4, 2010, New York Times (EDITORIAL)

The financial crisis and Great Recession have their roots in the housing bust. When it comes, a lasting recovery will be evident in a housing rebound. Unfortunately, housing appears to be weakening anew.  Figures released last week show that after four months of gains, home prices flattened in October. At that time, low mortgage rates (courtesy of the Federal Reserve) and a home buyer’s tax credit (courtesy of Congress) were fueling sales. That should have propped up prices. But it was not enough to overcome the drag created by a glut of 3.2 million new and existing unsold single-family homes — about a seven-month supply. The situation, we fear, will only get worse in months to come. Rates already are starting to rise as lenders brace for the Fed to curtail support for mortgage lending as early as the end of March. The home buyer’s tax credit is scheduled to expire at the end of April. And a new flood of foreclosed homes is ready to hit the market.

Real Estate Faces Tough Recovery Slog
January 4, 2010, Wall Street Journal

Real estate, which sparked the global economic downturn in 2008, struggled to recover in 2009. But the path to a full return to health is littered with land mines that could send the sector spiraling downward again, possibly upending the nascent economic revival.  The past year's progress in the housing market has relied on government programs that are scheduled to be phased out. The commercial real-estate market is faced with huge amounts of unoccupied space and a deluge of defaults and foreclosures that are putting new stresses on banks and other financial institutions that already are on life support. The outlook for 2010 is uncertain, at best.

The Biggest Losers
January 3, 2010, Wall Street Journal

Happy New Year, readers, but before we get on with the debates of 2010, there's still some ugly 2009 business to report: To wit, the Treasury's Christmas Eve taxpayer massacre lifting the $400 billion cap on potential losses for Fannie Mae and Freddie Mac as well as the limits on what the failed companies can borrow. The Treasury is hoping no one notices, and no wonder. Taxpayers are continuing to buy senior preferred stock in the two firms to cover their growing losses—a combined $111 billion so far. When Treasury first bailed them out in September 2008, Congress put a $200 billion limit ($100 billion each) on federal assistance. Last year, the Treasury raised the potential commitment to $400 billion. Now the limit on taxpayer exposure is, well, who knows?