It is no joke that the housing market is in despair, residential being the primary focus. States like Michigan where I live and Nevada have seen the bowels of hell (to put it lightly) for the majority of 2007.
The reports of, "new lows" this and, "recession fears" continue to scour across the headlines of the big names in financial news.
The latest is as such:
New-home sales tumbled 9 percent in November from October to a seasonally adjusted annual sales pace of 647,000, the Commerce Department reported Friday. That was the worst sales pace since April 1995.
"It was ugly," declared Richard Yamarone, economist at Argus Research. "It is the one sector of the economy that doesn't show any signs of life. It doesn't look like there is any resuscitation in store for housing over the next year," he said.
Because of the subprime crisis lenders have become far more strict on what it takes to get a loan. It hasn't been proven that this is a big exclamation point on the problem of falling sales, but it will be interesting to track into 2008.
Adding to this fact:
Would-be home buyers have found it more difficult to secure financing, especially for "jumbo" mortgages -- those exceeding $417,000. The tighter credit situation is deepening the housing slump. Unsold homes have piled up, which will force builders to cut back even more on construction and look for ways to sweeten the pot to lure prospective buyers.
"A lot of borrowers are being disqualified for loans. If you can't qualify for a mortgage the game is over. For those who do qualify, it takes longer to get loans," said Brian Bethune, economist at Global Insight.
You heard the man, game over.
Home Sales Plunge, Feed Recession Fears