04/15/10 Baltimore, Maryland – We’re barely two weeks away from the expiration of the homebuyer tax credit that has been propping up the market since last fall.
And already, signs point to its lugubrious affects wearing off. First, the Home Affordable Modification Program (HAMP) has been a joke. Of roughly 1.4 million “trial modifications,” less than one in five has been made permanent.
But a report out this morning reveals it’s even worse than that. Even those modifications that stuck are blowing up. As of March, 2,879 permanent modifications were canceled – nearly double the total from February.
The panel overseeing TARP on behalf of Congress has issued another report slamming HAMP. “We’re adding about 200,000 families a month to postings for foreclosures,” says Elizabeth Warren, the panel’s chairwoman. “There’s no obvious end in sight… I’m worried. I’m deeply worried.”
But that’s only the beginning. Well over one-quarter of all home sales in January were “distressed sales” – foreclosures, short sales, etc. The exact figure, as calculated by First American CoreLogic, is 29% – a monthly high last reached in January 2009.
Note the correlation between distressed sales and home prices. Both figures have once again started going in the wrong direction for the National Association of Realtors.
It’s too soon to say this is a discernable trend. But whatever happy medium the housing market found with government assistance last summer appears to be in jeopardy once again.
Addison Wiggin
for The Daily Reckoning
Addison Wiggin
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He’s the creator and editorial director of Agora Financial’s daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar… and Why it’s Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
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you can always count on the government to hatch some hairbrained halfassed cockamamie scheme….
i am more interested in the 10yr rate….so far armageddon hasn’t come but i suspect we will be quite over 4% by end of the year or qe 2.0 will start….but is there any more mbs to buy?