"No matter how paranoid or conspiracy-minded you are, what the government is actually doing is worse than you imagine." - - - William Blum

August 24, 2010

15 Reasons Housing Is Going From Bad To Worse

1. Record low home sales- New home sales are now at their lowest on record, and existing home sales began a steep decent in July. (And this is the busy time of year. Wait until winter.)
2. New home sale construction is also near record lows. There is already an excess of houses. (This is actually a good thing- but it does tell you how bad things are.)
3. Demand for mortgages is at a 13 year low. (Showing that low interest rates are insufficient to stimulate demand.)
4. Foreclosures are at record highs. (And getting worse.)
5. Repos are at an all time high. (See #4.)
6. Banks are writing off a massive amount of debt. (And they are going to be writing off a lot more before they are through.)
7. Record delinquencies- more than 10% of all Americans are behind on their mortgage. (Hence #4.)
8. Banks have significantly raised their lending standards. (Low interest rates aren’t useful to people who don’t qualify.)
9. Home prices are still too high and out of line with what people can afford. (Especially upper end real estate. With reduced income and no “wonky” financing, the McMansion market is being killed.)
10. With 28% of all households having one adult currently looking for employment, unemployment levels are high. (And unemployed people don’t buy homes.)
11. Bankruptcies are on the rise. (See #10 and #15)
12. Even Obama is bearish on housing. (Business Insider found a great “grumpy face” of the president for this one.)
13. Tax credits pulled home sales forward- shrinking current demand. (And future demand as well.)
14. Fannie and Freddie could be up to $5T in the hole. (You know, I doubt I’ve typed $XT more than a dozen times in my life. That’s a big number.)
15. U.S. economy is drowning in debt. (As well as many Americans.)

Thanks, George Bush. You definitely left a lasting impression on all of us.

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