Dollars & Sense

last updated: February 28, 2008 03:15:14 AM

3rd monthly decline in a row for housing

In more bad news for the beleaguered housing industry, sales of new homes fell in January for the third month in a row, pushing activity down to the slowest pace in nearly 13 years. The median price of a new home dropped to the lowest level in more than three years. The Commerce Department reported Wednesday that new home sales fell by 2.8 percent last month to a seasonally adjusted annual rate of 588,000 units, the slowest pace since February 1995. The median price of a new home dropped to $216,000 in January, down 4.3 percent from the December median sales price, the point at which half the homes sold for more and half for less. That was the lowest median price since September 2004 and underscored that the steep slide in housing still is under way.

Yin, yang of market for Fannie, Freddie

Fannie Mae and Freddie Mac will be allowed to expand their roles in the turbulent mortgage market even as worsening conditions in the housing sector punish the two companies. Fannie, the largest buyer and backer of U.S. home loans, said Wednesday it lost nearly $3.6 billion in the fourth quarter of 2007 amid mounting home-loan delinquencies and soured bets on interest rates. Freddie is expected today to report a $1.5 billion fourth-quarter loss, according to Wall Street estimates. Under a previous agreement with federal regulators, the timely filing of Fannie's and Freddie's financial results triggers the removal of an investment-portfolio cap placed in the aftermath of multibillion-dollar accounting scandals at the government-sponsored companies.

Dollar at record low compared with euro

The dollar sank Wednesday to its lowest level against the euro after markets took comments from the Federal Reserve chairman as a sign that more U.S. rate cuts are on the way. The 15-nation euro topped $1.50 for the first time in Asian trading since its 1999 introduction. The euro surged as high as $1.5143 after Ben Bernanke's testimony -- well above the $1.4967 it bought in New York late Tuesday. It settled back to $1.5120 in late New York trading Wednesday.

Coming Friday

Commercial real estate isn't likely to turn into the next "subprime mess," although some Wall Street investors are betting it will.

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