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Home >> Stock Forums >> Housing industry leaders admit credit is a problem

Housing industry leaders admit credit is a problem

AlfredSokol said: "Even the leaders of the housing industry are finally coming to terms with the fact that the credit crunch is [url=http://www.cnsnews.com/ViewNation.asp?Page=/Nation/archive/200708/NAT20070829b.html]bad for business[/url] [quote] The credit crunch now appears to be front and center on everybody's mind," said Jerry Howard, CEO of the National Association of Home Builders, during a conference call briefing on Tuesday. Howard said "62 percent of our builders are now reporting that they are feeling tighter lending standards that are affecting their business." In March, for instance, 33 percent said credit standards were a problem, said Howard, with an average decline of 31 percent in sales in the last five months. "We are now very close to the low point we saw in the recession of 1990 and '91," said David Seiders, chief economist at the National Association of Home Builders. "The drag from housing has been so strong. House values are eroding, and I think they will erode further.[/quote] He even goes so far as to suggest economic recession is on the horizon. Sort of a downbeat forecast!"

Heather said: "That makes a lot of sense. If consumers are feeling the pinch in their pocketbooks and their credit scores aren't perfect lenders aren't going to want to finance. That and I think that the housing market is cyclical anyhow.."

FirefighterB said: "[URL="http://biz.yahoo.com/ap/070829/expensive_homes.html?.v=2"]http://biz.yahoo.com/ap/070829/expensive_homes.html?.v=2[/URL] [URL="http://biz.yahoo.com/ap/070829/mortgage_applications.html?.v=1"]http://biz.yahoo.com/ap/070829/mortgage_applications.html?.v=1[/URL] Neither of these bode well for housing and, considering that we've all seen the articles about the number of loans that will be resetting for the next year or two, I dunno if things are gonna be getting any better anytime soon. I think we're about due for a recession. Anything to help bring these housing prices back to normal, set some of these traders/investors/managers/mortgage brokers/etc. back on the straight and narrow, and get us back to reasonable levels in the stock market would sure be nice."

AlfredSokol said: "It's an interesting time to be a homeowner. I found it interesting how the guy also said that "Conventional mortgage loans" are the most common type going these days. LOL, no kidding. This is the proverbial hangover that always happens when financial markets go nuts."

newinvestor123 said: "Yep, recession is on the horizon."

FirefighterB said: "[QUOTE=newinvestor123]Yep, recession is on the horizon.[/QUOTE] I'm starting to agree, especially when you consider 20-25 billion in ARMs resetting every month beginning now and going through 2008. Might not be a bad time to become a landlord..."

AlfredSokol said: "A housing recession, yes. But I don't think too many are expecting a complete economic meltdown. Lots of sectors are strong."

newinvestor123 said: "The economy has been piggybacking on the rise in home prices for the last ten years. People have had access to incredibly easy credit, including reverse equity loans (home ATMs), which are coming to an end. When someone loses their home, or struggles to keep it, their spending habits shift from discretionary spending to necessities, which effectively means an end to the strong earnings in many of the 'strong' sectors that everyone seems so eager to point out, especially tech and retail. Maybe the FED will be able to pump enough money into the system to prop it up short term, but eventually, monetary inflation without corresponding GDP growth leads to price inflation, and as prices inflate and GDP growth slows due to housing, we may even see some mild stagflation. If anything is going to keep us from going into a recession, it will be our international exposure, i.e. exports, which have been weak, but will probably ramp up as the dollar continues to decline - But I think that's a couple years away... At least that's how I see things playing out. Eventually, we will rejoin the global growth party, but the full impact of housing needs to be realized and absorbed before we can move on."

AlfredSokol said: "Maybe this stat will cheer you up a bit. Even though foreclosures are up in total numbers, they still represent only [url=http://realestate.msn.com/buying/Articlenewhome.aspx?cp-documentid=338165]one new foreclosure for every 1,117 U.S. households.[/url] From that number we can extrapolate that not everyone is affected."

FirefighterB said: "[QUOTE=AlfredSokol]Maybe this stat will cheer you up a bit. Even though foreclosures are up in total numbers, they still represent only [url=http://realestate.msn.com/buying/Articlenewhome.aspx?cp-documentid=338165]one new foreclosure for every 1,117 U.S. households.[/url] From that number we can extrapolate that not everyone is affected.[/QUOTE] If you could find a stat on the total number of people that purchased a new home in the past 5 years, THAT would paint a more accurate picture as to what could happen. To actually get to foreclosure takes some time in some states (average of 488 days here in NY State) and the mortgages resetting is just now ramping up in much higher numbers, so we might not see the whole picture for another year or so. My biggest question/concern/problem is this: [URL="http://mysite.verizon.net/vodkajim/housingbubble/"]housing prices almost doubled[/URL] in the last, say around, 7 years. However, incomes didn't double, as far as I can tell... (I dunno the validity of that graph, but I'm pretty sure you could find roughly the same everywhere) The MAIN reason for this almost 100% increase, in my mind, can only be chalked (chocked? Hmm.) up to loose lending standards and excess money. Plus, what about all of the new construction? If you think about the amount of new houses that have been built. Everywhere I've lived (FL, TX, NYC) there has been TONS of new developments going up. Where are all of these people coming from? I know the flight from the Rust Belt has been pretty heavy, but still... EDIT: Just read in the Scottrade daily newsletter that Deutsche Bank is estimating that $435 billion dollars in loans will be resetting by the end of 2008. Rounding to the end of this month, that puts the numbers higher than the JPM numbers that were posted up on here at an average per month amount of $27.19 billion."

newinvestor123 said: "[QUOTE=newinvestor123;52579]The economy has been piggybacking on the rise in home prices for the last ten years. People have had access to incredibly easy credit, including reverse equity loans (home ATMs), which are coming to an end. When someone loses their home, or struggles to keep it, their spending habits shift from discretionary spending to necessities, which effectively means an end to the strong earnings in many of the 'strong' sectors that everyone seems so eager to point out, especially tech and retail. Maybe the FED will be able to pump enough money into the system to prop it up short term, but eventually, monetary inflation without corresponding GDP growth leads to price inflation, and as prices inflate and GDP growth slows due to housing, [B]we may even see some mild stagflation[/B]. If anything is going to keep us from going into a recession, it will be our international exposure, i.e. exports, which have been weak, but will probably ramp up as the dollar continues to decline - But I think that's a couple years away... At least that's how I see things playing out. Eventually, we will rejoin the global growth party, but the full impact of housing needs to be realized and absorbed before we can move on.[/QUOTE] :th_coolio: [url]http://tinyurl.com/2hrssy[/url] Of course, it hasn't happened yet, but I still think we're headed in that general direction. By the way, where's Alfred been lately?"

lil dickie said: "Looks like a bad link."

pranith said: "Yes, credit crunching is always a problem in the business in the industry. I think the credit crunching should be decreased in terms of percentage of credit."

sr106 said: "i think it has a problems in the business in the industry.... no, we cannot say surely, the crunching should be decreased.... it depends on the business..."