Tuesday, February 22, 2005

Big Change In Market Sentiment

Today may be a key move in the housing and lending industries. Fannie Mae started the day at a 4 year low, but gave up another 1.5% today. The builders got hit as well, most of them fresh off 52 week highs. It makes sense that the lenders would precede the builders in a bear market pullback.

Pulte finished down 3.8%, Centex fell 4.4% and KB Home finished 2% lower; all three traded on higher than average volume. The big shocker was the CBOE Volatility Index, which jumped 17% by 5PM Eastern.

Gold was up over $8, the US dollar took a tumble versus the euro, yen, Swiss franc and Canadian dollar. Equities joined in with the Dow off 174 and the Nasdaq down 28 points. Both markets closed at their lows for the day.


At 5:52 PM, Blogger mspenelope said...

Dear Ben,

Thanks for sharing all your hard work with us...it is VERY appreciated! You are one of the few sources that I refer to on a daily basis to keep up with the current real estate market conditions.

Do you think the numbers of foreclosures being published are accurate?


Seems to me that the numbers in California are lower than they should be. There seems to be a higher number coming from the bankhomesdirect website.

It has been interesting watching the "home builder" sector of the stock market go sky high. I've been monitoring the R.E. market in the South Bay /California for the past 3 years
and can see the slow down and reversal patterns taking place. No longer are the sellers so quick to sell their homes "as is."

And last for now.....Russ's question is a very good one....where can one get this information regarding adjustable
rates resetting.....this year or in the years to come?

At 12:50 PM, Blogger Ben Jones said...

Ms. Penelope, I appreciate your kind words. I intend to follow this subject until it is resolved one way or the other.

There is a lot of baloney coming out of the RE media but foreclosures are mostly objective, because the source is public record. IMHO, the current frenzy among speculators in some areas (like CA)is preventing homes from reaching foreclosure. There are pockets of high default; Texas, Ohio, N. Carolina and Michigan for example.

Foreclosures should peak at the end of this mania, so I am looking for early indicators. Lenders, builders and mortgage originators are showing signs of topping out. If this is a bubble, prices and then defaults should be the last to peak.

The author of http://housingcrash.blogspot.com/ puts his own data together and he is convinced the SF media are not giving us accurate numbers.

I answered Russ' question thusly" I haven't examined that because rates are low and that hasn't become an issue..yet. In the links section you will find the Origination News and National Mortgage News sites have details on ARMs data. I will look into it.

That said, the big financing boom was in 2003. It would make sense that 3, 5 and 10 years following that year will be the main resettle dates. The way things are looking, these folks will be upside down before they refinance"...Ben


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