The Norris Group Blog

Today’s News Synopsis:

According to the NAR, Existing home sales increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April. The CIRB reports permits were pulled for 3,314 total housing units in April. Statistics from CAR show California home sales decreased 8.1 percent in April. The Federal Reserve doesn’t intend to sell any of its assets until after it begins raising interest rates.

In The News:

NAR - “Existing-Home Sales Continue to Improve in April” (5-24-10)

“Existing-home sales¹, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 7.6 percent to a seasonally adjusted annual rate of 5.77 million units in April from an upwardly revised 5.36 million in March, and are 22.8 percent higher than the 4.70 million-unit pace in April 2009. Monthly sales rose 7.0 percent in March.”

CBIA - “California Housing Starts Dip in April, CBIA Announces” (5-24-10)

“According to statistics compiled by the Construction Industry Research Board (CIRB), permits were pulled for 3,314 total housing units in April, down 6 percent from the same month a year ago and down 9 percent from March. Permits for single-family homes totaled 2,252, down 6 percent from April 2009 and down 5 percent from the previous month, while multifamily permits totaled 1,062, down 7 percent from a year ago and down 16 percent from March.”

CAR - “April 2010 sales and price report” (5-24-10)

“Home sales decreased 8.1 percent in April in California compared with the same period a year ago, while the median price of an existing home rose 21 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.”

Wall Street Journal – “Mortgage Rates Decline” (5-24-10)

“The housing industry had been bracing for months for a period of rising mortgage rates, triggered by the end of the Federal Reserve’s $1.25 trillion mortgage-securities purchase program. Conventional wisdom held that mortgage rates would rise as the Fed pulled back from propping up the market. Instead, many in the industry now say rates could drift as low as 4.5% this summer from 4.86% now, instead of rising to 6% as some economists projected, making for significantly lower payments for Americans buying homes or refinancing their mortgages.”

Bloomberg - “Fed Won’t Sell Mortgage-Backed Assets Until it Raises Rates” (5-24-10)

“The Federal Reserve doesn’t intend to sell any of its assets, including more than $1.1 trillion in mortgage-backed securities, until after it begins raising interest rates, the central bank said in a report to Congress.”

Housing Wire – “FDIC Sells $233m of Commercial Mortgage-Backed Notes” (5-24-10)

“The Federal Deposit Insurance Corp. (FDIC) sold $233m in notes backed by performing and non-performing commercial real estate loans from 22 financial institutions under receivership. The underlying mortgages bear an aggregate unpaid principal balance of $1bn.”

Bloomberg - “FHA Home-Financing Volume Sign of ‘Very Sick System’” (5-24-10)

“The FHA, which backs loans with down payments as low as 3.5 percent, insured $52.5 billion of home-purchase mortgages in the first quarter, compared with $46 billion of purchases of the debt by Fannie Mae and Freddie Mac, according to data compiled by Washington-based Potomac Partners. The FHA and Fannie Mae and Freddie Mac, which regulators seized in 2008, have been financing more than 90 percent of U.S. home lending after a retreat by banks and the collapse of the market for mortgage bonds without government-backed guarantees.”

Bloomberg - “Defaults on Apartment-Building Loans Set Record for U.S. Banks” (5-24-10)

“Defaults on apartment-building mortgages held by U.S. banks climbed to a record 4.6 percent in the first quarter, almost twice the year-earlier level, as more borrowers failed to repay debt approved near the market peak, said Real Capital Analytics Inc. in a report. Defaults on so-called multifamily mortgages rose from 4.4 percent in the fourth quarter and from 2.4 percent during the same period in 2009, the New York-based real estate research firm said today. Commercial-mortgage defaults also rose in the first quarter for loans against office, retail, hotel and industrial properties, Real Capital said.”

Bloomberg - “U.S. Subprime Hunt Targets Goldman, May Skip Cassano: Timeline” (5-24-10)

“Federal prosecutors don’t plan to bring charges against former American International Group Inc. executive Joseph Cassano after a two-year probe of the insurer’s collapse, according to a person familiar with the investigation. Justice Department investigators found there is insufficient evidence to charge Cassano, the former head of AIG’s Financial Products division, the person said.”

Inman - “3 fatal flaws of real estate negotiation” (5-24-10)

“Agents have a wealth of places both online and offline to find strategies that work. Agent blogging sites are rich with great suggestions, many of which are from the best agents in the business. Nevertheless, many of these strategies still use manipulation or one-upmanship. The result is that these old approaches often undermine the agent’s success.”

My Desert – “Short sales on the rise” (5-23-10)

“Real estate experts say they’re seeing spurts of multiple bids and cash buys on homes priced below $250,000 by investors with deep pockets, buyers from other states or residents with equity in their home, a move-up mentality or frazzled nerves from a volatile stock market.”

Washington Post – “Anger at the root of mortgage default problem, study finds” (5-22-10)

“Now White has published a paper based on the personal accounts of 356 strategic defaulters and homeowners on the verge of doing the same. His finding: People who intentionally default on their loans are not as economically rational or calculating in their decision-making as widely thought. In fact, he said, their decisions to pull the plug ‘may not turn out to be economically rational.’ But they walk anyway, in large part because they are at the end of their emotional rope. They have transitioned from feelings of anxiety and hopelessness to outright anger at their lenders, the government and a financial system they consider unfair.”

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