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Housing Slump Stirs Concerns
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| Contributor | RP |
| Last Edited | RP Sep 21, 2006 01:00pm |
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| Category | Analysis |
| Media | TV News - Columbia Broadcasting System CBS News |
| News Date | Wednesday, September 20, 2006 06:00:00 PM UTC0:0 |
| Description | These are tough times for the people who use hammers and nails to build the American dream — and those who employ them.
In some markets, buyers have gone missing — glued to their money in the expectation that home prices will fall. Desperate, sellers and developers are trying to sweeten their deals to unload McMansions and houses built on speculation. Now comes the news that new construction on homes has fallen so sharply that some economists use the "R" word when they talk about the housing market — and warn about what that might mean for the economy as a whole.
"Housing's in a recession; there are no two ways about it," says Paul Kasriel, chief economist at Northern Trust Co. in Chicago. "Typically when we get declines in housing of this magnitude, with a lag, the economy goes into recession. There have been exceptions, but not many."
Tuesday gave economists more cause for concern. The government reported new home starts fell 6 percent in August compared with July.
New home construction is now down about 20 percent compared with last year. There are seven months of unsold homes waiting for buyers — a record number. |
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