It was just a couple of days ago after the news of the earthquake in Japan that the home construction industry was one of the few sectors in the positive. That has changed quickly as shares of PulteGroup (NYSE:PHM), Lennar (NYSE:LEN) and Toll Brothers (NYSE:TOL) are all falling on data showing the industry continues to struggle.
The idea a couple of days ago was the hope that spring sales would boost the sector, but that's not going to be the case, as housing starts were at a 27-year low and new building permits dropped to a record low.
It appears the gains a couple of days ago were just investors trying to find anything that would move up at the time.
Toll Brothers was trading at $20.41, down $0.45, or 2.16 percent, as of 2:04 PM EDT. Lennar was at $19.20, falling $0.48, or 2.44 percent. PulteGroup was at $6.90, dropping $0.11, or 1.57 percent.
Showing posts with label Housing Market. Show all posts
Showing posts with label Housing Market. Show all posts
Wednesday, March 16, 2011
Tuesday, February 8, 2011
Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) Pressed on Mortgage Standards
With tighter mortgage standards put in place after the mortgage debacle, Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), JPMorgan Chase (NYSE:JPM) and Citigroup (NYSE:C), along with regulators, are being pressed by the National Association of Realtors to ease the rigid underwriting standards.
The total amount of mortgages by the big four banks dropped in 2010 to $916 billion from $1.04 trillion in 2009, a 12 percent decline.
While the National Association of Realtors asserts higher lending standards as the cause, others like Ron Dvari, CEO of New Oak Capital, see it continuing to be a hangover in prices from the housing bubble.
He said, "The best explanation for the total size being down are home prices for these areas being down significantly."
In other words, the housing bubble is still correcting, and homes are still overvalued.
Why should home buyers pay for the mistakes and irresponsibility of others who were buying homes to flip and make a quick buck. Individuals also entered into the home market for the same reason; living in the home for a short time while they expected the prices would go up.
A large number of homes are still priced too high, and until they come down to market levels, buyers aren't going to acquire them.
Standards are the problem, high prices are, and lowering lending standards just to pacify the NAR and make more money for their Realtors is a poor reason to lower lending standards again.
The total amount of mortgages by the big four banks dropped in 2010 to $916 billion from $1.04 trillion in 2009, a 12 percent decline.
While the National Association of Realtors asserts higher lending standards as the cause, others like Ron Dvari, CEO of New Oak Capital, see it continuing to be a hangover in prices from the housing bubble.
He said, "The best explanation for the total size being down are home prices for these areas being down significantly."
In other words, the housing bubble is still correcting, and homes are still overvalued.
Why should home buyers pay for the mistakes and irresponsibility of others who were buying homes to flip and make a quick buck. Individuals also entered into the home market for the same reason; living in the home for a short time while they expected the prices would go up.
A large number of homes are still priced too high, and until they come down to market levels, buyers aren't going to acquire them.
Standards are the problem, high prices are, and lowering lending standards just to pacify the NAR and make more money for their Realtors is a poor reason to lower lending standards again.
Monday, November 15, 2010
Citigroup (NYSE:C) Says Housing Supply will Outstrip Demand for Four Years
In somewhat troubling news, Citigroup (NYSE:C) says the demand for housing won't catch up with the existing supply until about 2014.
Josh Levin, an analyst at Citigroup Inc. said in a note to clients, “It will take three to four years to work off the excess supply and reach equilibrium.” This suggests, according to Levin, that won't be “a V-shaped recovery pattern” as expected by some in the industry.
Levin said there are close to 2.1 million homes on the market that aren't needed at this time. Those homes are measured by apartments or houses built to be lived in around the year.
This is probably why Caterpillar (NYSE:CAT) made their offer for Bucyrus (NASDAQ:BUCY), as construction equipment sales are sure to be down for the duration of that low demand for homes, making the need for alternative income to be generated, which Bucyrus would do through their focus on mining equipment.
The construction industry is in for a long struggle, as will be the overall housing market for several years.
Josh Levin, an analyst at Citigroup Inc. said in a note to clients, “It will take three to four years to work off the excess supply and reach equilibrium.” This suggests, according to Levin, that won't be “a V-shaped recovery pattern” as expected by some in the industry.
Levin said there are close to 2.1 million homes on the market that aren't needed at this time. Those homes are measured by apartments or houses built to be lived in around the year.
This is probably why Caterpillar (NYSE:CAT) made their offer for Bucyrus (NASDAQ:BUCY), as construction equipment sales are sure to be down for the duration of that low demand for homes, making the need for alternative income to be generated, which Bucyrus would do through their focus on mining equipment.
The construction industry is in for a long struggle, as will be the overall housing market for several years.
Tuesday, July 20, 2010
Iamgold (NYSE:IAG), Goldcorp (NYSE:GG), AngloGold (NYSE:AU) Up on Weak Economy
As we gradually sift through the economic data and news, confirmation we are far from any type of recovery continues to emerge, as the latest data in new housing starts confirm once government props are removed it falls apart. Gold companies like Iamgold (NYSE:IAG), Goldcorp (NYSE:GG) and AngloGold Ashanti (NYSE:AU) will continually be the beneficiaries of the weak economy, as gold prices resume their upward climb.
Gold prices finished above $1,190 an ounce today, and the majority of gold miners climbed with it, as housing starts dropped another 5 percent in June, following the 15 percent drop the prior month.
Among the group of gold miners mentioned here, Iamgold performed the strongest of the three, ending the trading session in New York at $16.21, gaining $0.65. or 4.18 percent. They did decline after hours to $15.99 a share.
Next was Goldcorp, who had a nice upward move of $0.60, to end the day at $40.35, or 1.51 percent. They were level in after hours trading.
AngloGold Ashanti moved the lowest of the three, reaching $39.53 by close, a gain of $0.43, or 1.10 percent.
There is nothing that points to any of this changing, as the job market would have to completely turn around, which it hasn't, as consumers continue to hold back on spending as the economy continues to sputter.
Gold investors will be a happy lot going forward, as there will be a big move once the reality is digested by the market.
Gold prices finished above $1,190 an ounce today, and the majority of gold miners climbed with it, as housing starts dropped another 5 percent in June, following the 15 percent drop the prior month.
Among the group of gold miners mentioned here, Iamgold performed the strongest of the three, ending the trading session in New York at $16.21, gaining $0.65. or 4.18 percent. They did decline after hours to $15.99 a share.
Next was Goldcorp, who had a nice upward move of $0.60, to end the day at $40.35, or 1.51 percent. They were level in after hours trading.
AngloGold Ashanti moved the lowest of the three, reaching $39.53 by close, a gain of $0.43, or 1.10 percent.
There is nothing that points to any of this changing, as the job market would have to completely turn around, which it hasn't, as consumers continue to hold back on spending as the economy continues to sputter.
Gold investors will be a happy lot going forward, as there will be a big move once the reality is digested by the market.
Gold Rises on Weak Housing Report
Although it'll take a little time to sort out because of conflicting economic reports which attempt to mask the extremely weak U.S. and global economy, the weak housing report again reminds us of the importance of holding gold in the face of major risk associated with the economy.
The appearance that there is uncertainty as to which direction the economy is going is exasperated by news reports that imply this is the case, when in reality, now that the faux recovery is exposed as soon as the government props are lifted away from various sectors of the economy, gold will again be seen as the one place investors can place their money and retain it.
If you have trouble believing that, just look every time the data come out and the ubiquitous and dishonest word "unexpected" is added to it. Every single time we get down economic news the financial press, especially mainstream financial press, somehow can't ever figure out what's going on, and they are caught off guard by the "unexpected" economic news.
How could anyone be that ignorant, for example, concerning the housing market in the U.S. As soon as the tax credit was ended housing started predictably plummeted, as they did again in the latest data, where they were down another 5 percent in June, which was the lowest in eight months. How can that be unexpected?
Now they're saying there will probably be a double dip recession in housing if the job market doesn't improve any time soon. We also know that's not going to happen, as the wasted 100s of billions allegedly already spent has done nothing to create jobs, as government money never can.
All we've got from that, for the most part, is more government employees feeding off the hard work of the private sector, and which they can't afford to do any longer.
How that all affects gold is this: housing starts plummeting, and if no jobs are created, we're going into another recession. Unless you think a miracle is going to happen or spending another $1 trillion or so will solve it, you're in for a world of hurt as the "unexpected" circumstances overcome you. Gold will explode upward again as the realization comes that we've been lied to again. There never has been prospects for a recovery, there has never been a recovery, and there isn't going to be a recovery for a long time. Gold will be the beneficiary of that as the realization grows on the investing community.
The appearance that there is uncertainty as to which direction the economy is going is exasperated by news reports that imply this is the case, when in reality, now that the faux recovery is exposed as soon as the government props are lifted away from various sectors of the economy, gold will again be seen as the one place investors can place their money and retain it.
If you have trouble believing that, just look every time the data come out and the ubiquitous and dishonest word "unexpected" is added to it. Every single time we get down economic news the financial press, especially mainstream financial press, somehow can't ever figure out what's going on, and they are caught off guard by the "unexpected" economic news.
How could anyone be that ignorant, for example, concerning the housing market in the U.S. As soon as the tax credit was ended housing started predictably plummeted, as they did again in the latest data, where they were down another 5 percent in June, which was the lowest in eight months. How can that be unexpected?
Now they're saying there will probably be a double dip recession in housing if the job market doesn't improve any time soon. We also know that's not going to happen, as the wasted 100s of billions allegedly already spent has done nothing to create jobs, as government money never can.
All we've got from that, for the most part, is more government employees feeding off the hard work of the private sector, and which they can't afford to do any longer.
How that all affects gold is this: housing starts plummeting, and if no jobs are created, we're going into another recession. Unless you think a miracle is going to happen or spending another $1 trillion or so will solve it, you're in for a world of hurt as the "unexpected" circumstances overcome you. Gold will explode upward again as the realization comes that we've been lied to again. There never has been prospects for a recovery, there has never been a recovery, and there isn't going to be a recovery for a long time. Gold will be the beneficiary of that as the realization grows on the investing community.
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