Thursday, March 31, 2011

Housing News Digest, March 31

ECB hiking before Fed would be new in a tightening cycle
FRANKFURT, March 31 (Reuters) - After following the Federal Reserve's lead for over a decade, the European Central Bank is poised to launch a series of interest rate hikes before the U.S. central bank for the first time in the ECB's history.

The change from the traditional pattern reflects the ECB's greater preoccupation with inflation pressures, as well as its higher level of discomfort with the emergency bond-buying programmes run by central banks.

What's the matter with Colorado?
The old frontier isn’t what it used to be. In the year to February, the Mountain West accounted for just 1.8% of national job growth, the worst performance of any Census region. Employment rose over four times as fast in the states along the Pacific coast. Three Rocky Mountain states—Idaho, Colorado, and New Mexico—posted their highest unemployment rates of the recovery in February. Residents are wondering what’s gone wrong.

Shadow Inventory Drops but Supply to Remain High for Extended Period
While the total volume of properties in the shadows dropped, CoreLogic says the amount of time it would currently take to clear this hidden inventory remains the same as a year ago – nine months’ worth of supply. The company says the unchanged supply calculation is due to the slower pace of home sales the industry has experienced in recent months.

Inflation pressures grow on Main Street
Still reeling from the recession, most mom-and-pop shops have held off on raising prices for fear of losing more customers. But business is finally starting to pick up, and after years of being squeezed by cost increases, a growing number of small businesses are hiking their prices.

Lawler: The “Shrill Cry” from Lobbyists on QRM
For ABS backed by QRMs, the DFA provides for an exemption of the risk-retention rule. For folks who don’t remember, the “inclusion” of an exemption for QRMs was in the act because of heavy lobbying by financial institutions and housing-related trade groups, and it put regulators in the uncomfortable position of trying to decide what types of mortgages were so inherently “low risk” that they should/could be excluded from the rule designed to ensure that ABS issuers had “skin in the game.”