The U.S. housing market has not reached bottom and will likely not begin to recover until the middle of this year, three housing economists said this week.
The weakness will extend to existing-home and new-home sales and housing starts as well as to home prices, which are likely to show their first full-year decline nationally since records have been kept, the economists told home builders at their annual convention here.
“I don’t think we’ve seen the bottom,” said David Berson, chief economist for Fannie Mae. “We’re going to see a much bigger drop in investor demand this year. But by the second half of the year the market will stabilize, if investors pull out quickly.”
Yep, good times are “just around the corner.” Unless, of course, you look at the long-term median prices, run-up charts, affordability, default rates, foreclosures, etc.
In other news, HSBC warns over US mortgage bad debt,
HSBC, Europe’s biggest bank, last night gave warning that bad debts in its troubled US mortgage lending business would be 20 per cent higher than forecast.
The bank blamed the impact of slowing house price growth, which it said is being reflected in accelerated delinquency trends across the US sub-prime mortgage market. It said that the level of loan impairment provisions for 2006 for its mortgage services operations will be higher than is reflected in current market estimates.
And more bad news, see Home Lenders Plunge as More Subprime Mortgages Sour and Subprime meltdown …