5/28/13, "What Housing Recovery? Percentage of First-Time Home Buyers Falls Again in April," profitconfidential.com, Michael Lombardi
"It’s almost as if the mainstream media is defining the U.S. housing market as being “hot,” while some economists are calling for robust growth ahead. But the reality is that we are far from a recovery in the housing market and more troubles could follow.
As I have discussed in these pages many
times before, institutional investors are running to buy homes for
rental income, because the yields elsewhere are getting thinner. As a
result, we’ve experienced hikes in home prices in the U.S. housing
market.
Institutional investors rushed to buy
homes with the philosophy of buy cheap, renovate, and rent. But they
might be in for a surprise. According to real estate research firm
Trulia Inc., since 2005, there have been almost four million
single-family homes added to the rental market. That supply has met the
demand created during the crisis in the housing market. (Source: Trulia
Inc., April 4, 2013.)
As a result, the rental rates that
institutional investors were banking on are actually compressing. Take a
look at the table below, which depicts the year-over-year change in
rental rates and home prices in some major cities in the U.S. economy.
As institutional investors are paying more for homes, their rental income is getting softer.
And the fact of the matter is that we
are missing the most important piece of the puzzle for a real housing
market recovery—first-time home buyers. Existing-home sales reported by
the National Association of Realtors (NAR) showed that in April,
first-time home buyers accounted for only 29% of the purchases in the
housing market—a decline of more than 17% from April of 2012, when
first-time home buyers accounted for 35% of all the existing-home sales.
(Source: National Association of Realtors, May 22, 2013.)
And there are other troubling issues in
the housing market; more than a quarter of all homes with a mortgage in
the U.S. housing market had negative equity in the first quarter of
2013, while 18.2% of homeowners didn’t have enough equity to be able to
cover the related costs of selling or moving into another home. (Source:
Zillow, May 23, 2013.)
All of this is just simply adding to my
skepticism toward the housing market recovery. At the very best, the
U.S. housing market is still very anemic." via Free Republic
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5/29/13, "Flipping Homes Back To 2005 Levels," Zero Hedge
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5/29/13, "Flipping Homes Back To 2005 Levels," Zero Hedge
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