There is more evidence housing is going into a double dip. They have listed both the pros and cons. I'm just show you the cons and you can look at the pros.
- Supply supply supply. Too much. Can't overstate that.
- Foreclosures. Banks are pushing properties through the foreclosure process at a really rapid pace now. I'm also hearing they may be ramping up sales ahead of any settlement with nation's attorney's general over the so-called "robo-signing" paperwork scandal. More foreclosures on the market means more supply and more price pressure.
- Gas prices: See yesterday's blog post. It's real.
- Mortgage applications. They are way below historical norms. All cash buyers in February rose to a record 33 percent of all buyers of existing homes. Many many Americans simply can't qualify for a mortgage anymore at a reasonable rate.
- FHA: Next month the cost of an FHA loan goes up yet again. FHA loan volume dropped 26 percent in February month to month.
- Consumer sentiment: Awful. No confidence in this market. Only the investors are out in droves, looking for and getting bargains. We need them, but we need real buyers as well.
I would a few more:
7. The privatization of Fannie Mae and Freddie Mac will probably increase mortgages rates.
8. The end of QE2 will probably drive both interest and mortgage rates higher in addition to the privatization of Fannie Mae and Freddie Mac..