MichaelC 160 Report post Posted February 14, 2008 Economists Predict More Gloom and Doom South Florida Sun-Sentinel.comEconomists predict more gloom for housingTop economists see construction, sales weak into 2009By Jerry W. Jackson Orlando Sentinel February 14, 2008 ORLANDO The International Builders' Show in Orlando opened Wednesday with leading economists warning that the nationwide plunge in residential construction and sales will continue at least until early 2009. David Seiders, chief economist for the National Association of Home Builders, told reporters at the opening of the trade group's annual conference that single-family home starts nationwide will probably decline another 27 percent this year, on top of last year's 30 percent drop. "There are a lot of downside risks," Seiders said, in the months ahead. He said falling home prices "are part of the solution" for getting sales and construction moving again because they will help balance of supply and demand. But he also warned that lower home values are a threat to the larger economy because people feel less well off when they see their houses losing value and so tend to cut back on their spending. "We're worried about a negative 'wealth effect' as housing weakens," he said, which is one reason the federal government is preparing to send tax rebate checks. Frank Nothaft, chief economist for the Federal Home Loan Mortgage Corp., known as Freddie Mac, predicted that the rebate checks won't begin to measurably help the economy until the third quarter. The Federal Reserve's recent interest rate cuts also lag in terms of the boost they give to the economy, he said. The one clear positive, he said, is that mortgage interest rates are back below 6 percent, at 2½-year lows. That means "life is looking pretty good," he said, for home buyers with excellent credit, sufficient cash for a down payment and the documentation to qualify for such relatively low rates. The economists who spoke Wednesday at the Orlando trade show conceded that they had not been pessimistic enough when preparing their industry forecasts a year ago, and were surprised by the extent of last year's meltdown in the subprime mortgage market and the effect that had on lenders and credit markets worldwide. Many builders are upset that the federal government has not done more to revive the nation's housing sector. Copyright © 2008, South Florida Sun-Sentinel Share this post Link to post Share on other sites
-Tony- 0 Report post Posted February 14, 2008 Many builders are upset that the federal government has not done more to revive the nation's housing sector. Oh like its thier job....This is going to have to run its course, if they do anthing it will just take the market longer to recover. Kinda like taking medacine as a kid, you didn't sip it you got it over quick. It will not be fun but if they rip the band aid off we will be able to heal faster. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted February 14, 2008 I wonder if these builders would be open to price controls during a runaway market like we recently experienced? You know, to keep housing affordable for the masses. . . Share this post Link to post Share on other sites
