November 14, 2006
-- by Dave Johnson
Home Depot on Tuesday warned that the US do-it-yourself market had entered a sharp slowdown because of weakening in the housing market and broader economy.But wait, there's more!
Countrywide CEO says housing slump has a year to go,
The slowdown of the U.S. housing market will last through 2007 as inventories are pared enough to prompt a change in consumer psychology, the chief executive officer of the nation's biggest mortgage lender said on Tuesday.And more: Dim housing market could prove pessimists right,
Mortgage lending has slowed as rising inventories in the housing market led to a "hard landing" for the industry after a decade of strong growth, Countrywide Financial Corp. CEO Angelo Mozilo said at a Merrill Lynch & Co. conference in New York.
"We have another year of adjustment, or transition" in the industry until consumers believe home prices won't decline, Mozilo said. "Various events will make the change take place and one of them is" a decline in available homes, he said.
There is, of course, a reason for the gloominess and it can be summed up in one word: housing. The housing market has been severely battered. In October, housing prices were almost 10 percent lower on average than they were a year ago, the largest yearly decrease since 1970. The prices of new homes have taken the worst beating, plunging 33 percent just since April.
More people are having trouble meeting their mortgage payments. Foreclosures were up nationwide. The foreclosure rate was 43 percent higher than at this time last year. Building permits for new-home construction have tumbled about 30 percent. According to reports, a growing number of housing developments are completely empty. An economic report from a leading bank calls the housing problem "the biggest residential construction bust for fifty years."
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On November 8th, the Big Picture quoted this piece here:
If the Democrats are smart, they'll spend a fair amount of time in the
next two years making it clear that:
a) they didn't cause the housing bubble
b) they can't stop it from bursting
It will likely take another year or so, just when things are starting
to heat up for the next general election, for most homeowners to
realize that much of their wealth has again evaporated.
Look for the Dems to try to fix the housing problem over the next two
It is the best piece of advice I've heard in quite a while.
Posted by: grannyinsanity at November 14, 2006 12:02 PM
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