Canaccord Genuity Morning Coffee on SPDR Homebuilders ETF (XHB): I Thought the House Always Wins?
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Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Rating Summary:
0 Buy, 0 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
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Canaccord Genuity Morning Coffee on SPDR Homebuilders ETF (NYSE: XHB): I thought the house always wins?
Data released Wednesday showed U.S. construction spending rose 0.4% in June following a 1.6% increase in May, driven by a 1.3% increase in housing spending. The S&P Case-Shiller Home Price Index, released on Tuesday, showed better-than-expected growth for the month of May. While the data indicates some improvement in the housing market, Treasury Secretary Timothy Geithner said at an event in Los Angeles that two to three years of “aggressive, creative” programs will be needed to help the U.S. dig its way out of the housing crisis. He said, “We’re going to keep at this as long as necessary. We think there’s a very good case for people deeply under water, experiencing hardship, to modify their mortgages by reducing principal.” Geithner is now trying for a third time to persuade the Federal Housing Finance Agency (FHFA) to allow principal forgiveness on mortgages backed by Fannie Mae and Freddie Mac. His push comes after the FHFA said that Treasury financial incentive would not be enough to make it financially worthwhile to write down troubled loans. Analysts and politicians are mixed on the benefits/drawbacks of principal reduction as some are reluctant to grant additional credit to those who pose a default risk while others believe principal relief could help strained borrowers and help stabilize the housing market. With economic data remaining shaky, and no clear solution in sight, it appears that the U.S. housing market will continue to be volatile for the foreseeable future.
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Data released Wednesday showed U.S. construction spending rose 0.4% in June following a 1.6% increase in May, driven by a 1.3% increase in housing spending. The S&P Case-Shiller Home Price Index, released on Tuesday, showed better-than-expected growth for the month of May. While the data indicates some improvement in the housing market, Treasury Secretary Timothy Geithner said at an event in Los Angeles that two to three years of “aggressive, creative” programs will be needed to help the U.S. dig its way out of the housing crisis. He said, “We’re going to keep at this as long as necessary. We think there’s a very good case for people deeply under water, experiencing hardship, to modify their mortgages by reducing principal.” Geithner is now trying for a third time to persuade the Federal Housing Finance Agency (FHFA) to allow principal forgiveness on mortgages backed by Fannie Mae and Freddie Mac. His push comes after the FHFA said that Treasury financial incentive would not be enough to make it financially worthwhile to write down troubled loans. Analysts and politicians are mixed on the benefits/drawbacks of principal reduction as some are reluctant to grant additional credit to those who pose a default risk while others believe principal relief could help strained borrowers and help stabilize the housing market. With economic data remaining shaky, and no clear solution in sight, it appears that the U.S. housing market will continue to be volatile for the foreseeable future.
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