clocker bob wrote:
Right back at you, coward. At least I put a name on my posts ( my e-mail link ). Stay hunched over your anonymous keyboard in your anonymous basement, pretending to have an anonymous pair...

The Journal from 6.21.07 wrote:Home Builders Cut Output,
Lending Support to Prices
By KELLY EVANS
June 20, 2007; Page A2

The nation's home builders continued to cut production last month as they struggled to pare bloated inventories.

Housing starts fell 2.1% in May to a seasonally adjusted annual rate of 1.474 million from 1.506 million in April, the Commerce Department said. Starts were down 24.2% from a year earlier and 35.7% from their peak rate in January 2006.

Building permits, which are required in most localities before construction can begin, rose last month. But much of the gain was a result of permits for apartment buildings. Demand for apartments has been growing as rising interest rates and tighter lending standards have encouraged more families to rent a home instead of purchase one.


Building permits overall increased 3% in May, but single-family home permits fell 1.8%, while permits for apartments gained 17%.

The slowdown in building activity, coupled with reports of rising foreclosures and declining confidence among builders, could mean the tumbling housing market has yet to hit a trough.

"Things aren't going to get better anytime soon," said Drew Matus, senior U.S. economist at Lehman Brothers. Mr. Matus said that yesterday's report suggests that builders are trying to rebalance the market by cutting supply instead of prices -- a decision, he said, that is better for builders and for the economy as a whole. "We economists prefer to see a volume adjustment rather than a price adjustment," he said.

Falling home prices can make homeowners feel less wealthy, prompting them to reduce spending. That, in turn, can slow economic growth. "What you really want to see happen is a balance between supply and demand in the market," Mr. Matus said.

Other analysts, however, said further price cuts are inevitable as inventories of unsold homes keep growing, partly because of rising foreclosures. The inventory of existing homes for sale has risen nearly 25% since last year, according to the National Association of Realtors. At the current rate of sales, it would take 8.4 months to sell all the previously owned homes now on the market. That was twice as long as the average in 2004 and 2005.

"We're going to have to see far more significant price declines to start moving this inventory," said Richard Moody, chief economist at Mission Residential, an Austin, Texas, apartment-building owner, referring to the single-family home market. "It's taking really significant price cuts and incentives to move these units."

"I don't call it a recession -- because there's no official definition of a housing recession -- but we are in that league in terms of a setback," said David Seiders, chief economist of the National Association of Home Builders.

He said that much of the recent weakness reflects tighter lending standards, as well as the meltdown in the market for subprime mortgages -- home loans made to consumers with shaky credit. Climbing interest rates in the past month have also nudged up mortgage rates.

Mr. Seiders said the housing market is weaker than he initially thought, and he expects housing starts to drop throughout the rest of 2007. "The bottom has not yet been reached," he said.

Rick Reuben wrote:

matthew wrote:Hark! What's this?

The Journal from 6.21.07 wrote:Home Builders Cut Output,
Lending Support to Prices
By KELLY EVANS

The nation's home builders continued to cut production last month as they struggled to pare bloated inventories.

You idiot. That's what occurs at the end of a housing bubble. Supply exceeds demand and inventory backs up.

Rick Reuben wrote:
This doesn't apply to those currently in default or entering default, though- those people don't own homes, they own mortgages. The banks will foreclose on the homes, and the banks will sell the homes for much less than the mortgage they wrote on it 3-4 years ago. For people who are not over their heads in debt, then what you say is true- they can ride out the housing recession.