No good news in today’s housing story:
Housing Slump in U.S. May Lead to First Drop Since Depression ,
The sharpest slowdown in U.S. home-price growth in three decades is trapping owners with mortgages they can’t afford, pushing unsold homes to a record 4.42 million and gutting profits for builders such as Lennar Corp. and Toll Brothers Inc. The U.S. median home price next year may fall for the first time since the Great Depression, says Gabriel Stein, chief international economist with Lombard Street Research in London.
The confidence of U.S. home builders fell for the eighth straight month in September, dropping to the lowest level since February 1991, the National Association of Home Builders said Monday. The NAHB/Wells Fargo housing market index dropped by three points in September to 30 from a revised 33 in August, indicating that most builders think the housing market is poor. Economists expected the index to fall to 31. A year ago, the index was at 65. A reading of 50 would indicate builder sentiment was balanced between good and poor.
And more bad news:
Ripple effects: US consumer expectations to decline due to weakening housing market,
Analysts at ING Financial Markets say that US consumer expectations are likely to decline again on account of the weakening housing market.
We are not sure the folks running the show fully embrace the risk of declining house prices,” Berg wrote in the letter, a copy of which was obtained by MarketWatch. If the housing market continues to decline “a major portion of Fannie Mae’s value could be wiped out.” He declined to comment for this story.
And, knowing the Bush administration’s record, possibly the worst sign of all: US treasury secretary dismisses housing dip,U
S treasury secretary Henry Paulson, making his debut at a meeting of Group of Seven (G-7) economy chiefs on Saturday, told them they need not worry about a housing-led collapse of the world’s largest economy.
With their record this means we ALL need to worry about just that.