Mr Mortgage

Homebuilding on an Uptrend?

1- NAR Existing Home Sales Report...30%+ were bank owned REO which sold. Not a strong report at all.
2- New Home Sales reported at the time of contract signing and with rates up sharply over the past month or so, and jumbo money over 8%, you will have a much higher fall out rate.
3- Fannie/Freddie jumbos will not help people to refi out of bad loans. It ill only help someone with a large downpayment who makes alot of money buy a home. That person did not need help in the first place. Plus, AGency jumbo loans will be priced much higher than standard conforming.
4- OFHEO news will not do much. They won't spend it all at once and they will look to buy distressed AAA closed loan assets to dilute the bad stuff happening with their portfolios.
5- Mortgage rates should not decrease...we have an inflation problem. Every move the Fed has made since last year when they began has spiked weakened the dollar and spiked mortgage rates. Why would that change. In a perfect world, as rate cuts stimulate economy, Bond yields/mortgage rate rise.

Go back to the drawing board on your thesis. You are dead wrong.