Housing Outlook Grim, As Downturn Called “Worst in a Generation”

[Purveyor]

Source: Housing Wire

By AMY MCALISTER
Published: June 23, 2008

The nation is in the throes of a housing downturn that researchers at Harvard University’s Joint Center for Housing Studies said Monday morning was “shaping up to be the worst in a generation.” While the falloff in housing starts, new home sales, and existing home sales already rivals the worst downturns in the post World War II era, the study found that home price declines and mortgage defaults are the worst on records that date back to the 1960s and 1970s.

“The slump in housing markets has not yet run its full course,” said Nicolas Retsinas, the director of the Joint Center for Housing Studies, echoing what has alreadly become prevailing sentiment among most economists.

“Mortgage rates have barely responded to the aggressive easing of the Federal Reserve, the supply of for-sale vacant units continues to grow, and much tighter underwriting is locking many would-be homebuyers out of the market.

“With home prices falling in most metropolitan areas, homeowners are tightening their belts, remodeling less, and staying on the sidelines.”

Buyers are also entering foreclosure at a record rate, thanks to lax lending standards that saw the number of borrowers paying more than half their income on housing skyrocket from 6.5 million in 2001 to 8.8 million in 2006, according to the study’s data. The number of homes entering foreclosure nearly doubled to 1.3 million in 2007 from about 660,000 in 2005 — numbers that are likely to get much worse this year, based of activity thus far.



Read more: http://www.housingwire.com/2008/06/23/housing-outlook-grim-as-downturn-called-worst-in-a-generation/

[Xipe Totec]

1. Well, a generation is 20 years

and in 1986 we got the shit kicked out of us when Regan was in office.

So, yea, that about sums it up.

[David__77]

2. Falling housing prices is a good thing for most.

And it's clearly good for the long term. The median housing price should be perhaps three times the median household gross annual income. That's a well-established historical trend that was only disrupted in the early 2000's by an unprecedented credit bubble. Social stability mandates that it return to the long-term trend.

[DaveJ]

4. Well stated....

I'm not sure, in an ideal economy, what should be done about people in trouble with their mortgages though.

The problem is that the numbers are so huge. Most either have to endure a huge loss on their "investments", or futilely hope for a huge profit. Either outcome is out of wack. Gamblers either winning or losing. While they don't deserve a huge profit from their gambling, most of us do not want to see them completely ruined.

This is the result of treating homes as an investments and not a necessities which they really are. It is the result of lack of government oversight over scumbags who artificially raise prices on something that everyone needs, just as if it were food, medicine or drinking water.

[Skittles]

5. yes

houses were ridiculously overvalued

[defendandprotect]

3. And this corruption led to tremendous overbuilding ---

which would take a long time to sort itself out ---

[Eurobabe]

6. I am so glad we got out of real estate when we did

all our cash is liquid now, but of course the value of the dollar is sliding, so either way the US is so screwed. :mad:

Fucking Bush.

[LynnTheDem]

7. Always happens under republican government. But even for republicans, George W. is

far and away below the bar.