Quote:
|
Originally Posted by dc_dux
ace.....perception is and will always be a factor in the financial and/or investment community.
Could it be that you just dont but much credence in the HMI Index by the housing trade association and one of the largest mortgage lenders because it doesnt support your position?
|
Sorry for not being clear. When there are conflicting indicators, I put value on the indicator reflecting real behavior and no value on the indicator reflecting "feelings" or subjective il defined views.
As you know there are many problems with indexes like the HMI Index. During a market correction an index like this is more reflective of the past than of the future. When you look at the HMI numbers over the past two year it is clear that the index failed to predict the market correction, as the index peaked in October 2005 right at the time the market started to correct. The current number, if I would give meaning to it, would indicate, a market bottom as a contrarian indicator. The number has been in the 30's since July of 2006, the low was September of 2006 at 30.
Another factor is the psyhcology of responding to surveys like HMI. When presented with choices like "good", "poor", or "fair" what do you say after a booming period where making money was easy? Market corrections tend to eleminate the weak links and you end up with a strong core group of business people who really understand the market and are willing to do the real work. People who made the easy money and won't survive will respond accordingly.
This was in the press release also.
Quote:
|
“Builders are uncertain about the consequences of tightening mortgage lending standards for their home sales down the line, and some are already seeing effects of the subprime shakeout on current sales activity,” said NAHB Chief Economist David Seiders. “The fundamentals of today’s housing market still are relatively strong, including a favorable interest-rate structure, solid growth in employment and household income, lower energy prices and improving affordability in much of the single-family market – due in part to price cuts and non-price sales incentives offered by builders. NAHB continues to forecast modest improvements in home sales during the balance of 2007, although the problems in the mortgage market increase the degree of uncertainty surrounding our baseline (i.e., most probable) forecast.”
|
http://www.nahb.org/news_details.asp...34&newsID=4258
And the regional number in the Midwest hit a low of 16 in August and September of 2006 and then 15 in November. Can Host explain why all lending and building just did not come to a complete stop in the Midwest? Mmmmm? I did not think so.