Now that our friends on Wall Street are whining about wanting less government oversight, maybe they can explain to the rest of us why the financial mess they created (together with their codependent friends in the GOP and the SEC) is going to drag down the entire system. Go ahead, tell us how the market really needs to be left alone and let market forces dictate.
In its latest monthly forecast, the group said it expects a 0.7 percent decline in the median price of an existing home sold in 2007. A month ago it had been projecting a 1.2 percent increase. Half of all homes sell for more than the median and half for less.Will the improved standards help? Of course. The question is how long will that process take and it is obvious that it won't happen overnight. The National Association of Realtors can see sunshine in the middle of a hurricane, so get ready to see larger and larger decline forecasts as this market stumbles.
The subprime mortgage mess led the group to cut its sales forecast as well. It said problems some buyers may have getting financing reduced its forecast for sales of existing homes this year by 100,000 homes to 6.34 million. That sales pace would be 2 percent below the 6.48 million sold in 2006.
The subprime mortgage sector, which handles loans to people with less than top credit, has seen a number of top lenders stop making loans, while others have gone bankrupt in recent months as delinquencies and mortgage default rates rise. That has led remaining lenders to tighten underwriting standards and raise rates for those borrowers.
