Zillow released their June 2014 National Real Estate Market Overview. In it is data that paints a very sobering picture for real estate, though their summary expects that prices will continue to rise. My analysis of the data that they present, however, leads me to quite the opposite conclusion.
Looking at mortgage payments and rents, Zillow data show that mortgage affordability is still relatively high, while rental affordability is at all-time lows. I agree about rents being in a bubble, but I find their mortgage affordability index to be misleading. Instead of looking at the ratio of housing prices to income, they only concern themselves with mortgage payments. Mortgage payments are very sensitive to interest rates, so if rates rise, then their affordability index will change very quickly. What is the expectation for future rates?
Rates will Rise
(click to enlarge)
All of the forecasts that
By Saul Griffith
The decision paves the way for a court case on the 'takings' plea by Fairholme Capital against FHFA.
Last week, Federal Judge Margaret Sweeney cleared the way for a court case that will determine whether the government's 'takings' of profits generated by GSEs Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCQB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCQB:FMCC), under the stewardship of the FHFA, was illegal and to the detriment of the companies' shareholders.
Fannie Mae, Freddie Mac vs FHFA: Jurisdiction
The judge ruled in no uncertain terms in her Discovery Order that her court had the authority to consider the merits of the lawsuit.
"With respect to the defendant's claim that the court lacks the authority to affect the exercise of the FHFA's powers or functions, the court agrees with the case law of the United States Court of Appeals for
Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for June showing that pending home sales declined with the seasonally adjusted national index falling 1.1% from May and dropping 7.3% below the level seen in June 2013.
Meanwhile, the NAR's chief economist Lawrence Yun indicated that while current