This week all eyes will be on four important housing statistics: Homebuilder sentiment, housing starts, prices and resale activity. As a reminder, both single-family starts and existing home sales fell over the month in August as the maximum benefit from the first-time homebuyer tax credit began to run dry.
As for existing home sales, Wall Street is expecting the figure to jump to 5.40 million units sold in September versus 5.10 million in August. The first-time homebuyer tax credit is considered the catalyst for the large increase in existing home sales.
But the first-time homebuyer tax credit expires at the end of November, and we might see a decline in existing home sales. Subprimeblogger.com reports, “Homebuilder sentiment had been up for three straight months but with government incentives set to expire sentiment turned south.”
In fact, the Obama administration is prepared for the numbers to creep downward as well. In fact, AOL reports that the “Obama administration is unveiling a new program to provide support to state and local housing agencies to provide help to thousands of homebuyers and renters.
“The administration said the new program would help to support low mortgage rates and expand resources for low- and middle-income borrowers who want to buy or rent a home.”
The government already has in place a program to help homeowners, but it’s widely criticized for not providing enough help. In fact, under the stimulus plan, $75 billion of government money has been set aside to help homeowners. Per OpEdNews, “The majority of it is going to the lenders that are part of the program. The money is covering their costs when they approve a high-risk borrower and to cover the difference of your mortgage loan and the actual value of your property.”
The Federal Home Affordable Program (FHAP) was created to help individuals who could no longer afford to make their monthly mortgage payments. Under the program, they could modify their existing loans to bring their payments down to more affordable amounts.
The new program will operate under a law that Congress passed in 2008 to bolster the housing industry.
However, an article in U.S. News and World Report says,
according to a “white paper” currently circulating in Washington prepared by those who argue the program needs more official oversight, the official HAMP numbers — which purport to show success — are incorrect because they include loan modifications that are not really modifications and the government, particularly the Federal Housing Administration, is not doing enough to help struggling homeowners.
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