Glut of unsold homes pummels U.S. housing – Some economists fear worst may lie ahead,

The long-predicted correction in U.S. housing prices has apparently begun.
The median selling price fell for the first time in 11 years last month, on an annual basis, pushed lower by the largest glut of unsold homes since 1993, and some economists fear the worst may lie ahead.
The price fall comes amid concerns that the U.S. housing slump could quickly spread to other areas of the economy as consumers react to the falling value of their nest eggs. In recent years, homeowners have used the equity built up in their homes to finance their lifestyles. A U.S. downturn now could also spill over into dependent economies, including Canada’s.

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Analyst says of new data: ‘Pop goes housing bubble’,

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One economist calls the popping bubble “the house of horrors.” Use caution when trying to counter housing downturn

Merrill Lynch economist David Rosenberg calls it “the House of Horrors.”
He’s referring to his fear that a plunging housing market could turn even uglier, taking the breath out of the economy and the stock market.
… He was fretting about foreclosures nationwide surging 53 percent year-on-year in August. He was pointing out that while many adjustable-rate mortgages have yet to move upward, already the Homeownership Preservation Foundation is receiving a record number of calls from borrowers seeking help.
Whether the housing downturn will still allow a so-called soft landing for the economy or yank the shopping instinct out of the American consumer remains to be seen.

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