President Bush Signs Massive Housing Bill Into Law, Hopes For the Best

The parade of lousy news for the housing market continues unabated.  The MBA's mortgage applications index dropped 14.1% last week to an eight year low indicating that sales and refinancing activity continues to be sluggish.  Yesterday, the Case-Schiller home price index showed a 15.8% decline from a year earlier, showing little respite from sagging home prices across the country.  Meanwhile, in depressing homebuilder news, Centex reported that its fiscal first quarter net loss widened to $150.1 million, on a revenue decline of 41%.  Average prices for Centex homes in the first quarter fell 10%, the number of homes fell 35% and new orders fell 35%.  This was on the heels of Pulte's $158.4 million loss a week ago.   

I suppose President Bush decided that this was as good a time as any to sign a major housing bill into law.  President Bush signed the massive homeowner bill into law this morning.  The President had threatened the measure with a veto over a measly $3.9 billion provision that provided grants to states to purchase and spruce up foreclosed properties.  Given our President's propensity to spend billions at the drop of the hat, I found it very ironic that he would threaten a veto over a measure that was so innocuous.  Perhaps this provision just needed some better marketing, a fancy title like the "Repossess-Our-Homeland Security Provision" or the "Weapons of Homeowner Destruction Act".  Thankfully, our crafty Treasury Secretary, Hank Paulson, more than likely calmly explained the gravity of the situation using a slide show with a few charts and graphs detailing the recent stock performance of Fannie Mae, Freddie Mac and rest of the US banking sector.  The stock market's reasonably healthy performance during the latter half of President Bush's term had been the last remaining portion of his legacy that wasn't embarrassing.  So Mr. Bush picked up his pen, and signed the bill into law.  Now we wait.