WSJ: Fear of Double Dip in Housing.
The U.S. housing market is sputtering again, adding to doubts about the vigor of the economic recovery.
Just a few months after housing showed signs of leveling off, bad weather and uncertainty over the extension of a home-buyer tax credit sent new-home starts in October tumbling 10.6% from the previous month. They fell to the lowest level since April, the Commerce Department said Wednesday. Starts of single-family houses fell 6.8%.
Earlier this month, Congress expanded the tax credit and extended it through April, so building should improve. Still, the latest data portend poorly for the economy overall, and for fourth-quarter growth.
On Wednesday Pulte Homes Inc., the nation’s largest home builder, warned investors of a grim outlook. “As we look out to 2010, we are expecting difficult conditions to continue,” said chief executive Richard Dugas.
Meanwhile, more Americans who bought homes during the boom are falling into mortgage limbo. About 3.4% of U.S. households — or about 1.9 million homeowners — are 120 days or more overdue on their payments, but not yet in foreclosure, according to LPS Applied Analytics, a research firm in Denver. That is up from 1.5% a year earlier.
Many of these people are likely to lose their homes over the next few years. That means more bank-owned homes will hit a market already suffering from oversupply.
Yesterday, Bob Toll of Toll Bros called FHA the new sunprime and was bangimg the table for another homebuilder bailout. Clearly, this will end similarly to the last crises, which actually never ended.
The Toll rant on FHA was pretty amazing as I assume FHA funds a lot of thier current business. Why did he take aim… is Bob Toll suddenly gone patriotic?
If so, he must feel he’s squeezed everything he can out of the system, and so has nothing more to gain. If so, not a good sign for housing…
Of course, this is total speculation on my part.