by Annaly Capital Management
Last week we noted that new home sales have not enjoyed the same kind of rebound that retail sales have experienced. Already this week we received a few more data points on the state of the housing market. On Monday Freddie Mac released their monthly volume summary for November which contained information on seriously delinquencies (90 days or more delinquent), which rose for the 2nd month in a row. As you can see below, this delinquency rate tends to move with unemployment, which crept back above 15 million people in November.
Delinquencies had been on an improving trend throughout 2010, and the recent reversal is worth watching.
Home price data for the month of October was released this morning, courtesy of the S&P/Case-Shiller. As you can see in the chart below, there has been a pronounced roll-over in pricing in recent months:
This marks the 4th month in a row of falling home prices, and the first negative year-over-year reading since January of 2010.
The coming year could be an interesting one for the US housing market. 2010 began with an extended tax credit for homebuyers, and mortgage rates declined throughout most of the year. 2011 is likely to be relatively stimulus free, and although some are interpreting rising interest rates as a sign that the Fed’s asset purchase program (aka QE2) is working, higher mortgage rates aren’t likely to be welcomed with open arms by an already weak housing market. Stay tuned.