Home sales down!!!

say talking heads on CNBC, but then went on to say that home inventory is very low and if you have no goods on the shelf, your sales are bound to go down.

LGIH is up today, so clearly those investors are not worried and maybe we are near a buyable bottom.

Some quick CNBC articles

More lenders are reporting easing credit standards, according to Fannie Mae, and expect standards to ease rather than tighten in the near future. This could help affordability in the housing market, which has been suffering under both tight credit and tight supply of homes for sale.

Good for LGIH.

…maybe just a pop for LGIH next reporting period.

Confidence among U.S. homebuilders took an unexpected step backward in December, as fewer potential buyers toured their properties. A monthly index from the National Association of Home Builders (NAHB) fell one point to 61. Fifty is the line between positive and negative, so sentiment is still good overall, but the expectation had been for a one point gain.

LGIH has a specialized clientele so we need to check actuals for our company.

The Federal Reserve did it — raised the target federal funds rate a quarter point, its first boost in nearly a decade. That does not, however, mean that the average rate on the 30-year fixed mortgage will be a quarter point higher when we all wake up on Thursday. That’s not how mortgage rates work.

Mortgage rates follow the yields on mortgage-backed securities. These bonds track the yield on the U.S. 10-year Treasury. The bond market is still sorting itself out right now, and yields could end up higher or lower by the end of the week.

The bigger deal for mortgage rates is not the Fed’s headline move, but five paragraphs lower in its statement:
Go to link to see statement.

Most people don’t hold a mortgage more than 7 years, which is why it is based on 10year.


Housing’s new crisis: Half your income for rent

There are now 9 million more renters than there were just a decade ago, the biggest jump in renters on record, and they are paying more for rent than ever before.

Of the nation’s now 43 million families and individuals who rent, 1 in 5 are considered “cost-burdened,” or paying more than 30 percent of their incomes on rent, according to a new study by the Harvard Joint Center for Housing Studies. Others pay half their incomes.

I think we have mentioned this before. LGIH’s bread-and-butter is selling to young couples buying their first homes and getting a mortgage at or below their rent payments. This is good news for LGIH.

I nibbled a bit more today. Overall I am underwater and bought bigger stakes at higher prices. Now I will be nibbling every now and then to bring down the average and what I believe is a real and good company for the future (a few years anyway).