As previously announced back in September, effective immediately our residential mortgage industry educational and training division Secret! University is changing its name to the AMC Institute. Because the company is working on a major curriculum change after the pending capital event occurs and our ownership changes it's been suggested that it should possibly provide, in part, an education and training facility in large part for the mortgage brokers who will be doing business with its new nationwide wholesale FHA, Conforming & 'Next Generation' Subprime lending sister company. More specifically, possibly provide a particular training and testing section to award various compliance levels to the mortgage brokers who learn the sister company's Underwriting Guidelines and Matrix the best. Conceivably resulting in their borrower files always being moved to the top of the pile (for example) … do to the 'Gold Star' which they could achieve … so that's a win – win.
Case-Shiller Index Points to Home Prices Firming Up
Home prices rose 0.3% in September, compared to 1.2% in August, according to the Standard & Poor's/Case-Shiller 20-city house price index, which posted its fourth consecutive monthly increase. Overall, the 20-city HPI is down 9.4% from a year ago but the declines are decelerating. In August, home prices were off 11.3% from a year ago. Values have improved since the spring, according to David Blitzer, chairman of S&P's index committee. "However, the gains in the most recent month are more modest than during the seasonally strong summer months," he said. IHS Global Insight economist Patrick Newport said prices are stabilizing across the country but he still expects another 5% decline. "We believe that prices have further to fall about another 5% because the foreclosure rate, which hit a record at the end of the third quarter, and the unemployment rate are still rising," he said.
Since the bottom was reached in April. The detail shows that prices rose in half the cities and fell in nine cities. It was unchanged in one city. The biggest increases were in Detroit and San Francisco. The biggest decreases were in Cleveland and Las Vegas. The overall index in September was down 29.1% from its peak in July 2006. Goldman Sachs believes this series will drop 10% next year. Basically sounds good to me!
And, given existing home sales rose to a 6.1 million annual rate in October, up from 5.54 million in September. This was higher than expected. Consumers are preferring to buy existing homes than new ones, probably because existing home prices are declining in many parts of the country. The surge in sales pushed down inventories to 7 months from 8 months in September. Usually 6 months is typical for this market. This was the highest market size since February 2007. The national median housing price fell to $173,100. The high volume of foreclosure sales is still driving prices down.
NABE Expects a Boom in Housing Starts Next Year
Housing starts will increase by 36% next year and the housing sector will contribute to economic growth for the first time since 2005, according to the November survey by the National Association of Business Economics. The 48 professional forecasters see housing starts hitting 790,000 units in 2010, which is up from 580,000 in 2009. The economists also expect house prices will bottom out this year and rise 2% in 2010. "When asked what factors were driving the housing rebound, panelists identified low house prices and interest rates as the two most important factors," a summary of the survey results says. The economists are forecasting that the 10-year Treasury note will yield 4.2% by the end of 2010 and the unemployment rate will average 9.6% in the fourth quarter of 2010. The unemployment rate is expected to "remain stubbornly higher." However, hiring is expected to pick up soon. "Within the next few months, companies should be adding instead of cutting jobs," said NABE president Lynn Reaser. OMG, more Good News!
Don't make this same mistake again!
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