| New home sales fall for fourth straight month; at 13-year low in February
Sales of new homes fell in February for the fourth straight month, pushing activity down to a 13-year low. While the rate of decline has slowed, the worst slump in more than two decades has not runs its course, analysts said.
The 1.8 percent drop sent the annual sales rate down to 590,000 units in February, the Commerce Department reported Wednesday. That was the slowest pace since February 1994 and down 57.5 percent from the sales peak of 1.389 million units in July 2005.
The median price of a home sold last month dropped to $244,100, 2.7 percent less than the level of a year ago. The median sales price is the point where half the homes sold for more and half for less.
A report by Standard & Poor's/Case Schiller on Tuesday showed that 16 of 20 major cities reported record annual price declines in January compared with a year ago.
Federal home loan banks get $100 billion to ease crunch
WASHINGTON -- The Federal Home Loan Bank system can increase purchases of Fannie Mae and Freddie Mac securities by $100 billion over two years in the latest government effort to stabilize the devastated market for mortgage-backed assets. The 12 regional banks in the system can up purchases of securities issued by the two government-sponsored companies to 600 percent of capital from 300 percent, the Federal Housing Finance Board, which oversees the banks, said Monday. The aim is to inject liquidity into a market that has seized up amid a global credit crunch sparked by the U.S. housing market downturn. The move "to enable the Federal Home Loan Banks to assist temporarily in this period of stress, consistent with safe and sound operations, will bring more liquidity to the mortgage market," Treasury Secretary Henry Paulson said in a statement.
Taxpayers will not foot bill for banks’ investment losses
Bank of England governor Mervyn King yesterday warned banks that the tax- payer would not pick up the cost of their losses on investments in the mortgage market and said they could face having to hold higher amounts of capital to cover losses in future. Addressing MPs, he said Threadneedle Street was in discussions with banks about long-term solutions to the current credit crisis which has seen financial institutions shying away from lending to each other and to individuals and companies. But he said the taxpayer would not foot the bill for any losses they made by buying or selling mortgage assets, many of which have plummeted in value after problems with rising defaults from American sub-prime borrowers became apparent in the summer. King argued they had reaped the benefits of securitisation without acknowledging the potential costs of that approach.
|
