Some are predicting that foreclosures will push home prices down another five to ten percent before hitting a true bottom. In addition, those rock-bottom mortgage rates that everyone is touting this week may be heading up, as the conservator of Fannie Mae and Freddie Mac today directed the two mortgage behemoths to inform servicers that guarantee fees would rise ten basis points next week. That, if you recall, is to pay for the temporary extension of the payroll tax cut. Yep, that money heads to the U.S. Treasury, not to the troubled balance sheets of Fannie and Freddie. This accused nostrum will likely raise rates a tad, but rates are still close to historical lows. And we should remember that.
It's all relative. Are things getting a bit better? Probably. I heard (or read…can't remember) someone today say that housing has gone from a negative to a nothing for the U.S. economy. So when we tout and rave about today's pending home sales numbers, we mustn't forget where we've been:
"It’s not going to keep 2011 from being the worst on record for new home sales, for single family permits and single family housing starts. Next year is going to be better, but that’s not saying much because this has been the worst year, probably since 1945," said IHS Global Insight's Patrick Newport. In other words, housing ain't exactly fecund, but it's at least inching off life support.
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