Home Sales are Key to Economy
13 Aug2008
Filed Under Buying, Selling · Tagged: economy, Financing, Foreclosures, Housing Market, Lending, Pricing, Value · Print This Article
This article published today in the WSJ suggests that the economy is waiting on housing prices to stabalize before things will get better. What is their prediction for this to occur: Not likely to happen soon! Looks like they think more than a year to stabalize with suggests that home prices have further to fall until our economy will be in a balance. This after uncertainty surrounding the future of Freddie Mac and Fannie May.
Home Prices Hold Key
Credit Crisis Will End When Assets Stabilize
By DAVID REILLY
August 13, 2008; Page C18
Back to the bunker.
That was the message after J.P. Morgan Chase warned of $1.5 billion in mortgage-related losses in the still-nascent third quarter and after a pair of prominent analysts downgraded Goldman Sachs Group.The moves reminded investors that, despite a brief rally in stocks since mid-July, credit markets are as unsettled as ever. And that will continue until the price of houses, the key asset underlying many credit products, starts to stabilize.
That doesn’t look likely to happen soon. Housing inventory has hit about 11 months’ worth of sales and is likely to peak at around 13 months’ some time in early 2009, according to Credit Suisse. Mortgage company Freddie Mac recently increased expectations for national peak-to-trough home-price losses to between 18% and 20% from 15% previously.
Comments
Feel free to leave a comment...
and oh, if you want a pic to show with your comment, go get a gravatar!