One rumor on the floor that Beazer might be in trouble and -- boom -- the whole sector drops like a brick. I run around calling all the analysts I know, and one by one they say it's all unfounded -- yeah, Beazer has some issues with litigation and its lending practices, and there's that SEC investigation that was announced as "formal" last week, but overall they're in no worse position than any of the other beleaguered home builders. Their stock may be, but the company isn't.
It's just indicative of the stress going on in every sector of housing. Today was supposed to be a good day. The Realtors reported that Pending Home Sales, that is contracts signed in June, not closings, were actually up 5% from May, the biggest jump in several years. They're still off from last year, but hey, any good housing news should be worth shouting from the rooftops.
But that news barely got a shout-out, owing to all the news yesterday from the mortgage sector, like American Home Mortgage and C-Bass. Investors making margin calls, and they're all in trouble. What does it mean? Anybody who was in the midst of getting a loan from AHM is out of luck and stuck back out on the market where ARMs and the like are as popular as that kid in 2nd grade who didn't know how to blow his nose.
And then there's that looming problem that all this foreclosure talk and default talk, and credit crunch talk is really just the beginning, because the bulk of the adjustable rate mortgages that hit at the height of the housing boom, when aggressive lending was at its peak, hasn't actually adjusted yet. This fall, billions of dollars worth of loans will reset, and millions of Americans will open mortgage bills with new numbers in them, numbers that might not compute with the household budget.
Can you say Edgy?
Questions? Comments? RealtyCheck@cnbc.com