President Bush made two real estate references in his seventh and final State of the Union. From the prepared text …

To build a prosperous future, we must trust people with their own money and empower them to grow our economy. As we meet tonight, our economy is undergoing a period of uncertainty. America has added jobs for a record 52 straight months, but jobs are now growing at a slower pace. Wages are up, but so are prices for food and gas. Exports are rising, but the housing market has declined. And at kitchen tables across our country, there is concern about our economic future.

… and …

On housing, we must trust Americans with the responsibility of homeownership and empower them to weather turbulent times in the housing market. My administration brought together the HOPE NOW alliance, which is helping many struggling homeowners avoid foreclosure. The Congress can help even more. Tonight I ask you to pass legislation to reform Fannie Mae and Freddie Mac, modernize the Federal Housing Administration, and allow state housing agencies to issue tax-free bonds to help homeowners refinance their mortgages. These are difficult times for many American families, and by taking these steps, we can help more of them keep their homes.

To read more, CLICK HERE.

No More Builder Incentives?

Read this snippet from a transcript of builder Centex’s recent conference call with Wall Street analysts (Thank you, Seeking Alpha!) …

Alex Barron - Agency Trading: Hey, guys. Wanted to ask you questions on this transparent pricing strategy. I guess, I am just trying to understand it seems to be obviously working and it seems pretty logical so I am trying to figure out why do you suppose other builders aren’t copying what you are doing and if they did what would you do compared to that or relative to that?

Timothy Eller - Chairman and Chief Executive Officer: Well I don’t know the answer to that. I would speculate that from standpoint of some private builders they may just not have the ability to do that. And based on the further question, what we are seeing is increasingly more and more of the public builders doing… doing just that because it’s it really is the reality of where the mortgage markets are today.

Cathy R. Smith - Executive Vice President and Chief Financial Officer: And then that’s a good thing we compete on community locations in our product. And that’s a good thing for us.

Alex Barron - Agency Trading: But, basically what your saying is rather than, let’s say, as an example instead of selling at $250,000 home with $50,000 incentive, all you doing is doing that your are selling it for $200,000. Is that basically the idea?

Timothy Eller - Chairman and Chief Executive Officer: That’s the idea. That’s basically… that… it’s back, its back to the way it used to be.

Centex is a nationwide builder currently selling homes in Orange (pictured at right.) To read the rest of the transcript, CLICK HERE

Fed cuts half point

The Federal Reserve cut its key interest rate another half-point, to 3%, as part of a continued effort to keep the U.S. economy from falling into a recession.Here’s the Fed’s thoughts on housing …

Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets.

To read the entire Fed statement, CLICK HERE!

Pimco Fed watcher Paul McCulley says … “The right stuff — half percent, with a balance of risks statement skewed to concerns about growth, leaving the door open for more. ben is honoring the covanent he made with the markets on Jan 10: You become more risk seeking and I will back you. Yea verily, he has.”

Stimulus may boost lending

It might become a little cheaper to buy a home. Part of the government’s economic stimulus package announced Thursday (DETAILS HERE) would boost the size of so-called “conforming” mortgage loans (under $417,000) bought by government-sponsored agencies. That move could allow more borrowers to find lower rates when buying a home or when refinancing an existing mortgage.

The current limit is $362,000 for Federal Housing Administration loans and $417,000 for loans sold to Fannie Mae and Freddie Mac. Interest rates are lower for “conforming” loans, and “jumbo” loans exceeding those amounts have become much harder to get since the credit crunch hit last summer.

Meanwhile, the Mortgage Bankers Association reports today on a mini-refinancing boom nationally. Refi applications are up 92% since November, the group said, and up 16.9% last week from the week before. Refi applications made up 66% of all apps last week. And average rates for 30-year loans, conforming of course, dropped to 5.49% from 5.62% a week earlier.

Holy Trinity Church to Open Doors in February

Arlington Bishop Paul S. Loverde will dedicate Holy Trinity Catholic Church in Gainesville, Virginia:

11 a.m., Saturday February 2, 2008

Holy Trinity Church 8214 Linton Hall Road, Gainesville, VA 20155

“The dedication of the newly-completed Church of the Holy Trinity in Gainesville is not only a blessing for this parish family, but also for our entire diocesan Church. I pray that present and future members of this Parish of the Holy Trinity will experience within these sacred walls the living presence of Jesus Christ, who will unite them in giving praise to God our Father in the power of the Holy Spirit and strengthen them for their witness to truth and to charity in the world,” said Bishop Loverde. (Catholic Herald)

Construction began in February 2006 and was funded by the parish’s Founding Families capital campaign and the Rooted in Faith-Forward in Hope diocesan capital campaign. Photos of the church are available at http://www.holytrinityparish.net/

“We are very excited to finally have a home in Prince William County and we are looking forward to being in our spiritual home; to worship God as a parish and be able to provide the sacraments. Holy Trinity Church is a beautiful setting to glorify God and the Blessed Trinity,” said Father Francis J. Peffley, Pastor of Holy Trinity.

The church’s Irish gothic-style pillars and arches, paired in threes, symbolize the Holy Trinity. A focal point for the 80,000 square foot Church is the main stained glass window, which has three rings made out of pre-cast concrete, weighing over 12 tons. The cost for the church, with furnishings, will total approximately $18 million.

Father Peffley celebrated the parish’s first Mass on July 21, 2001 at the Benedictine Monastery in Bristow, Virginia. Since the parish was established in 2001, Holy Trinity Church has grown from 200 parishioners in 2001 to 5,390 parishioners in 2007. To date, Mass for Holy Trinity parishioners has been celebrated at the Benedictine Monastery, Brentsville District High School, and at other area parishes.

Over 400,000 registered Catholics belong to the 68 parishes of the Arlington Diocese, which has opened six new parishes, three new schools, and established three new missions since 1999. Further information can be found at http://www.arlingtondiocese.org/.

What's Your Risk?

Mortgage insurers PMI published their latest home-price risk study … and guess who’s near the top? PMI economists juggle price momentum, affordability, regional economics and mortgage-payment problems to come up with their index, that translates to chance of home-price declines in the next two years in the 50 top U.S. markets. Here’s the dirty dozen, PMI’s riskiest …

1. Riverside-San Bernardino-Ontario, CA – 94%
2. Las Vegas-Paradise, NV – 89%
3. Phoenix-Mesa-Scottdale, AZ – 83%
4. Santa Ana-Anaheim-Irvine, CA – 81%
5. Los Angeles-Long Beach-Glendale, CA – 79%
6. Fort Lauderdale-Pompano Beach-Deerfield Beach, FL – 78%
7. Orlando-Kissimmee, FL – 74%
8. Sacramento-Arden-Arcade-Roseville, CA – 73%
9. Tampa-St. Petersburg-Clearwater, FL – 72%
10. West Palm Beach-Boca Raton-Boynton Beach, FL – 71%
11. San Diego-Carlsbad-San Marcos, CA – 69%
12. Oakland-Fremont-Hayward, CA – 65%

… 17. Washington-Arlington-Alexandria, DC-VA-MD-WV – 37%

PMI says: “Are we nearing the end of the current housing downturn? We don’t think so, given the magnitude of the run up in housing (with no significant housing downturn since the recession of 1991–92). That doesn’t mean that the level of housing activity has to fall to 1992 levels—after all there are almost 22 million more households today than there were back then, with higher income levels and lower unemployment rates. But the unsustainable surge of 2002–05 has to be worked off, and that’s what’s going on in the housing market today. The famous economist Herb Stein once noted, ‘If something cannot go on forever, it will stop.’ That is probably the best way to view the housing market today. We know that given the combination of demographics, job and income growth, and the level of interest rates, housing demand can’t fall without bounds.”

To read more, CLICK HERE

Dont't Hold Your Breathe

If you are waiting for the Fed to save us, you might want to look elsewhere for your ray of sunshine. In his latest Financial Market Strategies report, Wells Fargo senior economist Eugenio J. Aleman indicates that people banking on a Fed rate cut to spur home sales are looking in the wrong place for help.

In fact, he thinks that even if the Fed slashes rates it would do little to help the market. Here’s his reasoning:

“Let’s say that the Federal Reserve lowers the Federal Funds rate to 2%, does this mean that we are going to start buying homes and U.S. automobiles again? The reason why nobody is willing to buy a home today is not that interest rates are too high; the reason is that home prices are too high. Nobody will want to buy a home today when they know that if they wait they could get the home for a large discount.

“This means that it does not matter what the interest rate is on mortgages; nobody is buying. And thus, it does not matter what the Federal Reserve does with the Federal Funds rate. And I actually believe the Federal Reserve knows this. They are well aware of the ineffectiveness of the Federal Funds rate to help bring back the U.S. housing market and/or the U.S. auto sector. Thus, I still believe that many of the Federal Reserve Governors are going to be reluctant to lower the Federal Funds rate even if they ultimately go ahead with a decrease in the rate on January 30th.”

Aleman argues that the bigger concern for the Fed right now is inflation.

CLICK HERE for full report.