MBA Current State of Housing Finance Industry: Download mbahousing.pdf
This is floating around as a recent presentation by the MBA on Housing that discussion a few key questions - how bad is it, how bad is it going to get, how long is it going to last, how did it get so screwed up, and what should be done to keep it from happening again?
Shadows:
43% of foreclosure starts are on sub-prime ARMs.
California and Florida are hardest hit, but Arizona and Nevada are gaining fast as speculative investor properties start to get foreclosed on.
There are only 8 states that had average price decreases of -1% to -6.6% (the worst), while all the rest of the US averaged -1% to +9.3% appreciation) in the fourth quarter of 2007.
There will be a 15% drop in existing home sales, and a 21% drop in new home sales.
There will be a 21% drop in purchase originations, and an 11% drop in refinance originations from last year.
Bright Spots:
Reduced competition in the mortgage industry will lead to better pricing and underwriting for the lender.
Well capitalized parties with flexible execution will dominate the market.
Affordability is improving and FHA is growing in importance.
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