First, homebuilder confidence hit a new all-time low:
The confidence of U.S. home builders has been shaken to its lowest point since records began 22 years ago, a housing trade group said Tuesday.
The National Association of Home Builders' index for sales of new, single-family homes decreased to 18 this month from 20 in September. Builders are worried about mortgage market problems and bloated inventory. The reading was the lowest since the series began in January 1985, the NAHB said.
"Builders in the field are reporting that, while their special sales incentives are attracting interest among consumers, many potential buyers are either holding out for even better deals or hesitating due to concerns about negative and confusing media reports on home values," said NAHB President Brian Catalde, a home builder from El Segundo, Calif.
And DR Horton reported a terrible quarter:
D.R. Horton Inc (NYSE:DHI - News), the largest U.S. home builder, said on Tuesday quarterly net orders for new homes plunged 39 percent and cancellations spiked as the U.S. housing market continued to deteriorate.
D.R. Horton said net orders for its fiscal fourth quarter that ended September 30 fell to 6,374 from 10,430 a year earlier. The value of the orders dropped 48 percent to $1.3 billion from $2.5 billion.
"The 48 percent year over year decline in orders is very weak, especially considering it is off of an easy comparison with last year's fourth quarter orders down 33 percent," Wachovia analyst Carl Reichardt wrote in a research note.
Prospective buyers canceled outstanding orders at a rate of 48 percent during the quarter, up from 40 percent a year ago.
And the Mortgage Banker's Association said mortgage originations will fall to an 8-year low next year:
Mortgage originations will fall next year to the lowest levels since 2000, forcing job losses for at least 30,000 more home finance professionals, according to a forecast released on Wednesday by the Mortgage Bankers Association.
Inventories of homes for sale will remain high as tighter lending standards across the industry reduce available credit for prospective home-buyers, said Doug Duncan, the MBA's chief economist. Foreclosures as a result of increasing payments on adjustable-rate loans or poor underwriting will exacerbate the problem, he said.
"We have not yet seen fully the impact of the credit shock to the U.S. and world economies, and the severity of that impact will depend on how long it takes for the markets to return to normal functioning," Duncan said at the annual meeting of the Mortgage Bankers Association.
Total mortgage originations will likely decline 18 percent to $1.89 trillion, the lowest volume of purchase and refinance loans since $1.14 trillion in 2000, according to the forecast. Loan volume will slide another 6 percent in 2009, it said.
None of this news should be surprising. The credit market is still having problems, home inventory is at incredibly high levels, subprime foreclosures are increasing and consumer's are already heavily indebted.