Lawrence Yun, NAR senior economist, notes that widening credit availability will help turn around home sales. “Conforming loans are abundantly available at historically favorable mortgage rates. Pricing has steadily improved on jumbo mortgages since the August credit crunch, and FHA loans are replacing subprime mortgages,” he said.
And a surge of troops will help people who hate each other work together, and cutting taxes always increases revenues, yadda, yadda, yadda. YOU'VE GOT TO BELIEVE, PEOPLE!
A little perspective:
Data released over the past few weeks suggest a further weakening of the housing market, exacerbated by the breakdown in the subprime and prime jumbo mortgage markets. Delinquencies among subprime loans are increasing by more than expected, home sales continue to fall, unsold inventories remain near all-time highs, national house prices are falling, and housing starts have dropped to the lowest levels recorded since 1995. Amid these disruptions in the mortgage and housing market, lenders reported a lack of investor demand for high credit quality jumbo mortgages and other mortgages not eligible for agency purchase. This dislocation pushed the cost of prime jumbo financing significantly higher relative to rates on conforming loans... This spread has moderated somewhat over the past couple of weeks, however, and fell below 80 basis points in late September, suggesting some modest improvement in the market conditions for prime loans with balances above the conforming loan limit. Even so, the spread remains historically wide -- suggesting that the prime jumbo market remains in distress.
Yun is living in his own world if he thinks that (1) housing has bottomed (2) 2008 is going to be any better.
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