Housing Improvement

Data out today from the Commerce Department show the first year over year increase in housing sales since this period of 2005. Perhaps of even greater importance is the number of unsold new homes in inventory which has literally been halved since January. While there is still a lot of ground to make up these are some signs of improvement. The South is faring much better than most other parts of the country and essentially all of the gains in recent monthly data have come from our region.

There are of course big dark clouds hovering over residential housing in many areas. A sizeable number of homeowners owe more on their homes than they may be worth in the current market. Most of these owners won't be selling in the near term however and for the main will continue paying their mortgages. As an aside, I recently saw a television ad for a mortgage company touting "no appraisal " mortgages. I really could not believe what I heard but indeed that was in the ad. These type mortgages were the crux of the problem to start with and it troubles me that these are being made again. Some of the data from FHA (which makes 3.5% down payment mortgages) suggests big troubles brewing within that market segment.