And One More Thing . . .
I’d like to re-visit an issue I alluded to in one of my previous posts. It has to do with a large residential lender, in classic rhetoric, proclaiming it was time to beef-up staff in anticipation of a significant housing recovery.
Well, their timing was good. Home prices in the U.S., including distressed sales, increased 12.1% in April 2013 compared to April 2012, according to CoreLogic’s Home Price Index. This was the biggest year-over-year gain since February 2006. Give credit where credit is due.
This time, however, permit me to ask a couple of rhetorical questions:
- With an abysmal U.S. public debt picture ($16.8 trillion including intragovernmental obligations), is this momentum somewhat artificial or shortlived?
[Reading a little further into CoreLogic’s report, home prices remain 22.4% below their peak (Florida’s prices are still down by more than 40%, and Nevada by 47% – these percentage examples are not insignificant)]
- Were staff increase announcements made solely in preparation for a recovery, or perhaps to offset previous announcements that they were exiting the wholesale lending business?
[Wholesale lenders are fed loans exclusively by the mortgage brokerage community. Lenders exiting this kind of business really have no choice but to find a way to source lending business on their own – therefore they MUST hire]
Yes – things have picked up, but I see little evidence of other banks aggressively increasing staff right now. I hope I’m wrong, but I still say we have a ways to go. Be prudent. Be cautious.