Some housing bubble news from Wall Street and Washington. "Declines in home prices in 20 U.S. metropolitan areas accelerated in the 12 months ended in March as the supply of homes exceeded demand, a private survey showed. Home values dropped 1.4 percent from March 2006, after declining 0.8 percent in the year ended February, according to a report today by S&P/Case-Shiller."

"The report is consistent with last week's data that showed sellers had to reduce prices to lure buyers into the market for both new and previously-owned properties."

"Thirteen cities showed a year-over-year decrease in prices for the month, led by a 8.4 percent drop in Detroit home values and a 6 percent drop in San Diego."

The Associated Press. "U.S. home prices fell 1.4 percent in the first quarter compared to a year ago, the first time since 1991 prices have shown a quarterly decline, according to a housing index released Tuesday by Standard & Poor's."

"'We still don't see anything that looks like a clear bottom,' S&P index committee chairman David Blitzer said. 'We're still headed down.'"

"Boston, Detroit, San Diego and Washington, D.C. showed the greatest year-over-year declines in prices."

From Bloomberg. "New home construction in the U.S. may take until 2011 to return to last year's level, said David Seiders, chief economist for the National Association of Home Builders in Washington."

"'We've fallen way below trend because we soared way above trend during boom times,' Seiders said in an interview. 'The upswing will be relatively slow, unlike earlier cycles.'"

"The inventory of unsold homes is the largest since the Washington-based National Association of Realtors started counting them in 1999 and house prices have suffered the steepest drop since the Great Depression, according to the realtors' group."

"Atlanta-based Beazer Homes USA Inc. was offering houses in the first quarter at a development about 44 miles outside Phoenix, Arizona, for $136,990, down 36 percent from the year-earlier price of $215,490, said Samantha Morris, senior consultant in Metrostudy's Mesa, Arizona, office."

"Larry Zacks, president of closely held Putnam County Builders Inc. in Mahopac, New York, said he put a 3,150-square-foot house on the market in February for $799,000 and had to reduce the price, first to $749,000, then to $699,000 and then to $659,000."

"'We finally sold it for $649,000,' Zacks said. 'Things are moving, it's just a question of finding the right price. In a glutted market, buyers have a huge selection, so they don't have to be forgiving.'"

"Prime Home Builders in Fort Lauderdale, Florida, is advertising a 23 percent discount on a new four-bedroom townhouse in Naples, Florida. The price was slashed to $344,169 from $449,258 in a development where about half the units have been sold, said Keith Thompson, a marketing consultant with Prime Home Builders."

"'It was under contract and the buyer forfeited the deposit, which is pretty common in this market,' Thompson said. 'We're putting it out at a much lower price by rolling the deposit over to the next buyer.'"

From Business Week. "Real estate investors got a swift smack back to reality May 25 with news that existing home sales fell to a four-year low and inventories reached a 15-year high."

"The time-tested retail strategy of 'slash prices, move inventory' appeared to be the lesson of the Commerce Dept. data released May 24, with an 11.1% drop in the median sales price for new homes driving new-home sales to an annualized rate of 981,000."

"The pricing inducements, the largest monthly drop in median sales prices on record, suggest the country's housing-market woes aren't over yet. 'What you're seeing is the blue-light special,' Pat McPherron, an economist with Moody's Economy.com, told the Associated Press on May 24. 'The only way this market is going to move is by price-cutting.'"

"A Banc of America Securities analyst downgraded home builder NVR Inc. Tuesday, saying home sales and prices in the company's key markets are sinking."

"NVR makes more than half of its revenue and nearly three-quarters of its profits in Washington and Baltimore, analyst Daniel Oppenheim said. He expects home sale in those markets to worsen and NVR's margins to fall."

"'Our May survey pointed to a 4th straight month of weak traffic in D.C., after improvement from November to January,' he said.

National Mortgage News. "We got us an industry catfight! This tiff started early last week at the Mortgage Bankers Association's National Secondary Market Conference in New York where, according to reporting by National Mortgage News' Ted Cornwell, trade group officials made a number of veiled public comments blaming the foreclosure crisis on, well, loan brokers."

"Some mortgage bankers believe that brokers work for incentives (commission, yield spread premiums) and could care less about a loan's long-term performance."

"National Association of Mortgage Brokers president Harry Dinham fired off a statement saying, 'It is truly unfortunate that the president of the Mortgage Bankers Association has attempted to shift blame away from Wall Street, federally chartered banks, state-chartered lenders and underwriters for the subprime situation we find ourselves in today.'"

"NAMB is calling for the creation of a national registry 'so that consumers can be protected by the bad actions of all originators whether they work in a bank, state-chartered lender, credit union or mortgage brokerage.'"

"In 2002, Chinese investors owned about $100 million in U.S agency MBS. Now they own well over $110 billion, a nearly 1,000-fold increase in less than five years."

From Fitch Ratings. "Home prices were virtually unchanged for 2006 subprime mortgages even as subprime defaults rose to double digit levels, according to Fitch Ratings in a new report."

"The analysis showed that subprime loans originated in the first quarter-2006 (1Q'06) have experienced only 0.5% of home price inflation (HPI) after 12 months, but that defaults have jumped to 8.3% of outstanding mortgage balances."

"The low HPI is exacerbating the increased risk associated with these loan attributes said Managing Director Glenn Costello. 'Some of these borrowers are probably experiencing outright home price declines.'"

The Record Searchlight. "Although the online mortgage company, owned by Residential Capital, sells loans mostly to borrowers with good credit, many people mistakenly thought Ditech was a subprime lender. It also didn't help that Ditech, based in Costa Mesa, was best known for its low-budget commercials featuring a pudgy, scheming banker shouting: 'Lost another one to Ditech!'"

"Increasing foreclosures and delinquencies have prompted regulators to examine lending practices, and falling home values in many parts of the country have increased the threat of foreclosures on subprime mortgages."

"In response, Ditech is ditching the ubiquitous commercials in favor of a more sophisticated marketing campaign that portrays Ditech as a respected financial resource for prime borrowers, who make up about 95 percent of its business."