Some housing bubble news from Wall Street and Washington. "Sales of new one-family houses in February 2007 were at a seasonally adjusted annual rate of 848,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 18.3 percent (±12.2%) below the February 2006 estimate of 1,038,000."

From MarketWatch. "Inventories of unsold homes rose 1.5% to 546,000, representing an 8.1-month supply, the largest inventory in relation to sales since January 1991. The inventory is up 27% in the past 12 months. Inventories are probably understated, because they don't include homes thrown back on the market due to buyer cancellations."

"The number of completed but unsold homes rose to 179,000 from 177,000, up 43% from a year earlier."

"Residential builders have piled on incentives, including free vacations and new cars, to sell homes and reduce inventories. Such incentives are not subtracted from the sales price reported to the government."

"Sales are reported when a contract is signed, not at the closing of the sale. Builders have reported a large increase in cancellations in recent months. Since cancellations are not reflected in the government data, reported sales are likely overstated."

"Sales in January were revised lower to show a 15.8% drop to an 882,000 annual rate, compared with the 937,000 reported previously. Reported sales for December and November were also revised lower."

From CNN Money. "The pace of sales tumbled from February 2006, with all four regions of the country showing sharp declines. New home sales are more of a leading indicator since they are booked when a sales contract is signed, not when the sale is closed, as is the case with existing home sales."

"Monday's report suggests the housing market weakened further in February rather than stabilizing. It also raised fears that problems in the subprime mortgage sector first seen in February could further batteer the struggling real estate market. A recent survey by the National Association of Home Builders found builders saying the subprime woes were already cutting into their sales."

From Origination News. "Nearly three-quarters of Washington-area real estate agents in a recent online survey said the availability of subprime mortgages and tighter standards for alternative-A loans have hurt their ability to get homes under contract, according to City Influence."

"In addition to the 73% who responded affirmatively on this question, 60% said their clients are having difficulty qualifying for the loan they need to buy a home, the firm reported."

"'I think this raises a number of questions about the longer-term impact of mortgage availability on the velocity of sales in the market,' said Kim Hoover, president of City Influence. 'We know that a significant portion of buyers who were able to enter the homeownership category over the last decade took advantage of more flexible lending standards. The question is, if that group is unable to buy a home going forward, how much of a ripple effect will that have up the chain?'"

From Reuters. "Bank holding company OceanFirst Financial Corp. said it sees an additional provision in the first quarter to repurchase subprime loans due to first-payment defaults."

The Wall Street Journal. "Mark Ernst, CEO of H&R Block Inc., has said repeatedly the company will announce whether it has reached a deal to sell Option One Mortgage Corp. by the end of March. But it may have to lower its $1.3 billion asking price on the unit, which deals in risky subprime mortgages, if it wants to cut a deal by then."

"In regulatory filings, H&R Block said Option One’s delinquency rate in its fiscal third quarter that ended Jan. 31 rose to 11.2 percent from 5.6 percent last year. Because of a jump in defaults, the lender recorded loan-loss provisions of $111.1 million, a nearly 750 percent increase from $13.1 million a year ago."

"Of those delinquencies, 84 percent were on loans written during previous quarters, indicating that H&R Block had sharply underestimated the increase in defaults. 'There are likely to be more provisions in the future, and you would think an astute buyer would know that,' said Donn Vickrey, co-founder of equity research firm Gradient Analytics."

From Bloomberg. "U.S. foreclosure filings last month jumped 12 percent compared with a year ago as homeowners struggled with declining home values and higher adjustable mortgage rates."

"More than 130,000 homes entered foreclosure last month, according to RealtyTrac. That's the second-highest since RealtyTrac began collecting data in January 2005."

"'The rise in foreclosures over the past year probably only marks the beginning of the problem,' wrote Jan Hatzius, a Goldman, Sachs & Co. economist. 'The main reason to expect further deterioration is that house prices are likely to fall significantly in 2007, with further declines possible in subsequent years.'"

"Interest rates on about $775 billion worth of subprime loans are scheduled to rise in the last nine months of 2007, according to Bear Stearns Cos."

"The median U.S. home price was $212,800 in February, 1.3 percent less than a year ago and down 7.6 percent from a record in July."

"One-fifth of home loan borrowers have adjustable rate mortgages, according to Credit Suisse Group. About 15 percent of the $9.5 trillion U.S. mortgages are subprime, according to Bear Stearns."

"'People who bought homes in the 1980s and 1990s started refinancing their equity out in the 2000s, so we can't assume that foreclosures will only affect people who bought their homes in the last couple of years,' said Schahrzad Berkland, who publishes the California Housing Forecast in San Diego. 'And a lot of adjustable-rate mortgages were taken out by prime borrowers, so we can't assume that the more qualified borrowers will be immune to losing their homes.'"