Tuesday, November 25, 2008

Housing Bust - Not near the bottom

Bonddad - the data shows are no where near the bottom. Click for the existing homes for sale chart. I think we can start talking about a bottom at 3.5 million, but that may not be the bottom which could be 2 million.
Simply put, demand is down from a weakening job market and tighter lending standards. Supply is still high because of the increasing foreclosure situation. Decreased demand + high supply = lower price. It's that simple.
Oh, I am very tired of the conservative propaganda that Democrats caused the housing crisis. That argument is false but it being highly pushed on conservative radio and emails. Walton and Johnson on Radio Mojo in the morning, not Mojo in the morning, added a few racist comments while pushing it on AM 950 the other day. * corrected.

From McClatchy news media, the most accurate of the traditional mainstream media.

Private sector loans, not Fannie or Freddie, triggered crisis
As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail.

Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.

Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.
The Freddie and Fannie default rate is around 1.2%, the national default rate is over 5%. What does that say about standards and Democrats pushing "liberal government" to give loans to poor minorities causing the crisis?

Tags: ,

No comments: