Tom Lindmark

Bad News for Housing

I've said elsewhere that I don't doubt that there are a lot of homeowners that are underwater. Unfortunately, no one has explained how they come up with numbers like 20%. What's the methodology and how far underwater are they?

There are projected to be 1.5 million household formations in the country next year. These new households represent a new source of demand for housing. Don't forget that in a growing country like the U.S. it doesn't take long to replace lost demand.

Desperate Homebuilders Bringing Back Bubble-Era Financing - Housing Tracker

Powersports,

I second your endosement.

Desperate Homebuilders Bringing Back Bubble-Era Financing - Housing Tracker

The irony of the return of the 100% loan is that while the government tries to work out the current housing mess it's adding fuel to the fire with no downpayment loans. These are not private sector loans, rather they are FHA insured loans. Here's a link to an article I wrote yesterday on the subject-blog.metro-real-estate...

Dangerous Optimism in Homebuilders

I'd add one other key factor that's driving the downturn and is going to mute any turnaround. That's the much tighter lending standards currently being imposed by Fannie, Freddy and even FHA. Buyers actually have to qualify and to do so prices are going to have to come down to levels that allow them to do so. Look at affordability indices for the nation and for specific locales and I think you'll see that prices still have to move downward and stay there to get buying going again. Affordability was tossed out the window during the boom but it's back with a vengence.