Today’s Housing Bubble Post – ‘Downward Spiral’

Mortgage problems are causing a tightening of credit, which means fewer people can purchase houses, even as inventories are already at an all-time high. In other words, no one can sell their houses, which causes more foreclosures which means more credit tightening and higher interest rates which means prices drop which means buyers stop buying which means no one can sell their houses which means more foreclosures which means…
U.S. mortgage, housing markets seen caught in ‘vicious cycle’,

Problems in the nation’s mortgage and housing markets are feeding off each other and creating a “vicious cycle,” analysts at Stifel Nicolaus & Co. said Monday.
“The rapidly increasing scope and depth of the problems in the mortgage market suggest that the entire sector has plunged into a downward spiral similar to the subprime woes whereby each negative development feeds further deterioration,” wrote analysts Chris Brendler and Michael Widner in a research note.
[. . .] Underscoring the shaky conditions in housing, Stifel Nicolaus said its earlier forecast calling for home-price deprecation between 10% and 15% may prove optimistic.
The analysts see a worsening tailspin as housing prices fall harder, leading to more credit deterioration.