too many empty houses, home builders will have to resort to using bulldozers to knock down empty houses to get rid of the supply and raise prices again. Cheapest way to fix the mess, get rid of the supply.
the supply is/will diminish. one issue slowing the process; mortgage loans are not processed at the speed of light anymore. 2-3 months for processing and the hoops are as they were 15 years back especially for first time home buyers. Consequently, the closed sales are lagging the mortgage apps. considerably. by early fall the mortgage this will translate into the gradual decline of inventory. Financials were strong today and REITs generally lag financials. the fed meeting next week helped hinder the market. to date, the script read by the feds is being writen by the administration.
Applications for new morgages and refi's were down so the Fed and the market will have to push the 10 and 30 year down. It's going to take some time but I would expect the worst to will be over soon.
I would say by next month we should see some real slow down in unemployment. Chrysler will have a positive effect very soon. Most auto suppliers service all three auto's so employee call backs dispite supplier bancrupties.
The auto suppliers will scramble very soon to be ready for production and the same thing will happen in Aug. The market is going to have to start pricing this in very soon.
market sentiment is in negative mood so even with today's housing report, it would still go down. More new hoses could be viewed as overbuilt, supply higher than demand..well! go figure what and how WS views the reports on daily basis.