Housing starts touched a 1-1/2-year high in April, but a drop in building permits to a six-month low suggested the housing market recovery may struggle to gain momentum without more government aid.
"... one factor that has experts really scared: homes that are ready to be sold but haven't been put on the market. Right now, there could be more than 4.5 million homes in "shadow inventory," according to a recent report by Barclays Capital.
This so-called shadow inventory is a recent phenomenon. In the past, inventory was either tight or it wasn't. But now, with home prices so low and so many foreclosures on the market, both homeowners and banks have been waiting to put properties on the market.
"These sidelined sellers closely watch the market for signs of a possible turnaround and rush in if there's a hint of good news," said Leslie Appleton-Young, chief economist for the California Association of Realtors.
But as more sellers put their homes up for sale, supplies increase, which will depress prices again. Rinse and repeat ad infinitum.
That vicious cycle could cause prices to bounce up and down for years. "I see a saw tooth bottom," Humphries said. "Prices go up; inventory rises, which sends prices down again. That plays out for three to five years of no appreciation. ... Without price appreciation, it leaves more homeowners in negative equity. That's toxic. Any setback, like a job loss, they go into foreclosure."
The number of homeowners who missed at least one mortgage payment surged to a record in the first quarter of the year, a sign that the foreclosure crisis is far from over.
More than 10 percent of homeowners had missed at least one mortgage payment in the January-March period, the Mortgage Bankers Association said Wednesday. That number was up from 9.5 percent in the fourth quarter of last year and 9.1 percent a year earlier...
More than 4.6 percent of homeowners were in foreclosure, also a record... up... slightly from the end of last year...
The number of American homeowners who have missed at least three months of payments or are in foreclosure has surged to around 4.3 million...
Federal Reserve officials were divided over when the Fed should start shedding some of its vast portfolio of mortgage securities. The tricky endeavor would move the central bank closer to tightening credit for millions of Americans.
Minutes of the Fed's closed-door meeting April 27-28, released Wednesday, showed Fed officials expressed wide-ranging views about when and how the Fed should go about selling some of the $1.25 trillion of mortgage securities bought during the financial and economic crises. The assets were purchased to drive down mortgage rates and aid the housing market.
Its challenge is to sell those assets in a way that doesn't weaken home prices and jack up mortgage rates...
Most Fed officials favored "deferring asset sales for some time." A majority preferred beginning sales some time after the Fed's first increase in its key short-term bank lending rate. Such an approach would postpone any asset sales until the economic recovery was firmly entrenched.
The federal government sill sitting on a crap-load of mortgage securities.
ONE of the most troubling tics of Team Obama is the frantic rush to declare that every terror attack on American soil is carried out by an isolated individual with no connection to al Qaeda or other groups. It was the gist of their rapid response to the failed airline bombing on Christmas Day, to the Fort Hood shooter and, most recently, to the plot by Faisal Shahzad to set off a car bomb in Times Square.
