Housing Declines Continue
After the big shake up in the last two days, all markets decided to rest a little and some took some profits.
Bonds were the exception. Oil-led inflation drove interest rates up 0.10% to a near term high.
In the news today….
Home prices fell 3.1% in the first quarter of 2008 on an annualized basis. This was the biggest drop ever. The 1Q 08 was 1.7% lower than the 4Q 07 – and this means that price drops are accelerating. Prices declined in 43 states with the biggest drops being 8% in both CA and NV.
Subprime mortgage delinquencies – those that were bundled into securities – are the highest ever. Here are some details:
- 36.8% of loans made in 2005 are delinquent – up 2% since April
- 37.1% of loans made in 2006 are delinquent – up 6% since April
- 25.3% of loans made in 2007 are delinquent – up 6% since April
2007 was the worst year for making bad loans – so it looks like as time moved from 2005 through 2007, the standards used to write mortgages deteriorated.
Jobless claims were 365,000 for last week, and this was less than expected, and down 9000 claims. This current number of jobless claims shows stress in the labor market. Predictions are this number will increase over the next few months.
Here are today’s numbers:
Dow Jones 30 Industrial – 12,626 (up 24 points)
10 Year Treasury Bond – 3.91% (up 0.10%)
Euro – 1.5718
Gold – $918 (down $10)
Oil – $130.81 (down $2.36)
Gasoline – $3.33 (down $0.07)
