The worst is yet to come for the U.S. housing market
Posted by ecoshift on June 22, 2007
Fortunately the following hyperbole is not mine. We are actually spilling bits and bytes of data denominated in dollars. Not that there’s no pain involved, just not much blood.
Rate Rise Pushes Housing, Economy to `Blood Bath’ (Update2) – Bloomberg.com
By Kathleen M. Howley
June 20 (Bloomberg) — The worst is yet to come for the U.S. housing market.
The jump in 30-year mortgage rates by more than a half a percentage point to 6.74 percent in the past five weeks is putting a crimp on borrowers with the best credit just as a crackdown in subprime lending standards limits the pool of qualified buyers. The national median home price is poised for its first annual decline since the Great Depression, and the supply of unsold homes is at a record 4.2 million, the National Association of Realtors reported.
“It’s a blood bath,” said Mark Kiesel, executive vice president of Newport Beach, California-based Pacific Investment Management Co., the manager of $668 billion in bond funds. “We’re talking about a two- to three-year downturn that will take a whole host of characters with it, from job creation to consumer confidence. Eventually it will take the stock market and corporate profit.”