"New-home sales in January drop 12.6 pct New-home sales in January drop sharp 12.6 pct. as US housing sector falters Derek Kravitz, AP Real Estate Writer, On Thursday February 24, 2011, 11:02 am WASHINGTON (AP) -- Sales of new U.S. homes fell significantly in January, a dismal sign after the worst year for that sector in nearly a half-century. New-home sales dropped to a seasonally adjusted rate of 284,000 homes last month, the Commerce Department said Thursday. That's down from 325,000 in December and less than half the 600,000-a-year pace that economists view as healthy. Bad winter weather likely hampered some sales, although the industry has been struggling since the housing bubble burst in 2006." http://finance.yahoo.com/news/Newhome-sales-in-January-drop-apf-3048098018.html?x=0&sec=topStories&pos=main&asset=&ccode=
Not much of a market especially if rates are going up. Sellers and banks are gonna be lowering the rates to attract new buyers.
Any dips in current mortgage rates will increase the fair value gains Non cash gains on CYS MBS portfolio..
The price of the house goes up when a buyer agrees to a higher interest rate. Do an amortization schedule and test the theory a 150K house bought at 5% will price lower than a house purchased at 7%. Right now the market for new houses is falling. And when this happens developers and banks work to lower the entry price/rates to improve sales. It's just the natural law of the market.
That would be consistent with what they said in the CC.
With the last offering, I think they met their goal of bringing expenses to 2%. (They had to 5x the number of ourstanding shares to bring it down from about 3.7%.) mgmt has now increased their fees (salaries) by about 2.5x since last year; at some point you have to slow things down.
Maybe it's just wishful thinking that we don't see another offering until most of those forwards settle and let interest income "normalize."