JJacquemin

Calling a Housing Bottom

I agree that the mortgage lending aspect is critical to the health of the housing industry. However, I believe that there's another critical factor at work in this particular housing downturn: a tremendous oversupply of housing units. There are more unoccupied and available housing units in this country than at any previous time in history, even adjusted for population growth. In the last years of the boom, builders were building to meet what turns out to have been demand from speculators, rather than from buyers who intended to occupy these units. As a resultThere are more housing units than there are people to occupy them. Until this excess supply is absorbed by new immigration, household formations, and destruction of obsolete housing stock, even the availablilty of mortgage financing is not sufficient to create a bottom. It will take time...