Lance Anderson, President and Chief Operating Officer of NovaStar Financial, Inc., announced today that they entered into a final agreement to sell all of it’s servicing rights to Saxon Mortgage Services, Inc.
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Freddie Mac said today that the average rates on a 30 year fixed rate mortgage rose slightly last week. A 30 year fixed rate mortgage averaged 6.4 percent compared to 6.37 percent from the prior week. Fifteen year mortgages averaged 6.06 percent when compared to 6.03 percent the week before.
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Federal Reserve Chairman Ben Bernanke informed congress today that the credit crisis has caused “significant market stress”. He offered new assurance that regulators would take steps to curb fallout related to the mortgage mess.
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Sales of previously owned homes fell to their lowest levels in almost four years and declining home prices hurt consumer confidence this month, indicating the U.S. economy is struggling to get rolling following its first fiscal quarter slowdown.
Cold weather and a considerably weak housing market contributed to a drop in the nation’s consumer spending last month, experts say in a new report.
Many South Florida residents are eating out less and springing for fewer big purchases like a new car or a vacation, the Miami Herald reports.
It’s not just because of the increasing cost of living, and it’s not just limited to Florida.
Economists have talked at length about the new cost-consciousness among consumers who had relied heavily upon their houses for their net worth and are now watching the housing market slow way down.
And as the housing market slides, the new consumer psychology is rippling through regional economies - and is already hurting big companies.
Businesses are saying they’re starting to see less activity because of the housing market slowdown. And it’s not just the obvious businesses within the housing industry - like real estate, home mortgage or construction companies - which have already taken clear hits.
Miami-based home builder Lennar, for example, reported last week that its first-quarter profit tumbled 73 percent on softness in the housing market made worse by problems with subprime (bad credit mortgage) lending. Lennar warned it doesn’t expect to meet its 2007 earnings guidance.
But companies you wouldn’t automatically associate with housing are also pointing to the real estate slowdown as a big culprit for fewer earnings, in such industries as varied as cars, cruise lines and shipping.
In February, although prices remained relatively flat, sales of single-family homes declined by 31 percent in Miami-Dade County and 20 percent in Broward County compared to a year ago, Florida Association of Realtors data indicates.
The condo numbers were worse, and inventory has nearly doubled. There’s little doubt, in turn, that the bevy of for-sale signs may start wreaking havoc with consumer spending as the housing market slows.
The boom saw many homeowners taking out sizable adjustable rate mortgages or simply tapping home equity out of their properties. Now, with possible jumps in mortgage rates and the equity well drying up, people are worried and therefore more cost-conscious.
As fears of home loan woes escalate, confidence among Floridians dropped last month, according to data released by the University of Florida last week. The index, last month at 92, declined to 86.
“Housing is an increasing problem,” said survey director Chris McCarty. “It’s very clear that people were using home equity to fuel spending, so I don’t think this should be that much of a surprise,” said McCarty, citing the rampant speculative buying and use of exotic loans.
Economists see the housing slowdown working its way through the economy in this fashion: First, home prices slow down, then the number of people who are extracting equity from their homes also starts to taper off. That pool of money shrinking leads to fewer purchases of big-ticket items.
Last year, 16 percent of the new car purchases in the Sunshine State were made with a home equity loan, according to Art Spinella, the president of Oregon-based market research firm CNW Research. That compares to 9 percent in 2000.
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