Market watchers say some sellers ‘in denial’ about market correction

John W. Schoen / Senior Producer / MSNBC

The latest data on the U.S. housing market — tracking prices and sales before a major financial storm hit the U.S. mortgage market — show continuing declines in both sales and prices.

And while prices have begun to fall along with sales, in many markets those prices will have to fall further before the market turns around, say economists, homebuilders and market analysts.

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Economy was good, danger signs were ignored. Then came the cliff.

By Dale Kasler - Bee Staff Writers / Sacramento Bee

Summoned to the Legislature in late January for a hearing on subprime mortgage lending, Marc Lowenthal struck a confident tone.

Lowenthal, a senior executive at Irvine subprime lender New Century Financial Corp., told lawmakers that the industry was in solid shape — and an asset to the nation. Clamping down on subprime loans would only bring “severe, negative consequences for consumers, the real estate market and the economy,” he said.

Outside the Capitol, in the neighborhoods of Sacramento and beyond, mortgage defaults were already climbing. But New Century was still all pedal and no brakes. Loan volume remained brisk, and the company seemed headed for another blockbuster year.

Just a couple of weeks later, New Century was essentially kaput, done in by runaway loan defaults and a panic among investors. Its shocking demise marked the start of a crisis in the mortgage industry that has rattled Wall Street and raised fears of a recession.

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Martin Crutsinger, AP Economics Writer

Existing US Home Sales Drop in July to Slowest Pace in Nearly 5 Years

WASHINGTON (AP) — Sales of existing homes dropped for a fifth straight month in July while the number of unsold homes shot up to a record level.

Many analysts said the worst slump in housing in 16 years is likely to deepen in coming months, reflecting the recent turmoil in credit markets, which has caused lenders to tighten their standards.
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Courtney Schlisserman / Bloomberg.com
New home sales probably dropped to the lowest level in seven years in July, showing a deepening housing recession that will drag down U.S. economic growth.

Purchases fell to an annual rate of 820,000 last month from 834,000 in June, according to the median forecast of 73 economists surveyed by Bloomberg News. That would be the slowest pace of sales since June 2000.

A continuing slump in housing may undermine the Federal Reserve’s efforts to stabilize U.S. credit markets, which have been roiled by losses on securities backed by subprime mortgages. Americans are finding it more difficult to buy homes as mortgage rates rise and banks tighten requirements for getting a loan.

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MSNBC

Mozilo tells CNBC that credit market turmoil will take time to work through

Calling the current credit crunch “one of the greatest panics I’ve ever seen in 55 years of financial services,” Countrywide Financial CEO Angelo Mozilo said Thursday that the ongoing housing slump will likely push the U.S. economy into recession.

The financial markets took some solace from news that the largest U.S. mortgage lender had taken steps to shore up its finances as it struggles with a liquidity crunch with an infusion of $2 billion from Bank of America to help stabilize the company.

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National groups says membership will decline for the first time in 10 years

Associated Press

Plummeting stock prices. Mortgage lenders filing for bankruptcy or shutting down.Layoffs at homebuilders and banks. Soaring foreclosures and loan defaults. Damage from the nation’s slumping housing market is evident throughout the economy and permeates financial markets. Add real estate agents to the growing list of victims, although they know few tears will be shed for them.

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By Steve Lawrence / ASSOCIATED PRESS

Consumer advocates yesterday called for a moratorium on home foreclosures, warning that California is facing a tidal wave of foreclosures over the next year as more homeowners are hit with payment increases brought on by subprime loans and risky mortgages.

“The curve is really starting to go up,” said Alan Fisher, executive director of the California Reinvestment Coalition, a group of nonprofit organizations and public agencies that advocate for the poor and minorities. “We’re seeing just the beginning of a problem.”

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Reuters / Yahoo Finance / Jonathan Stempel

A deepening U.S. housing slump has caused an alarming surge in job losses at U.S. financial services companies, and the end is nowhere in sight, consulting firm Challenger, Gray & Christmas Inc. said on Tuesday.

The industry has announced 87,962 job cuts so far this year, 75 percent more than the 50,327 recorded for all of 2006, Challenger said. Nearly one-fourth of this year’s cuts have been announced in August alone .

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U.S. Home Foreclosures Jump Sharply in July, Up 9 Percent From June

AP / Yahoo Finance - Alex Veiga, AP Business Writer

The number of foreclosure filings reported in the U.S. last month jumped 93 percent from July of 2006 and rose 9 percent from June, the latest sign that homeowners are having trouble making payments and finding buyers during the national housing downturn.
There were 179,599 foreclosure filings reported during July, up from 92,845 during the same period a year ago, Irvine-based RealtyTrac Inc. said Tuesday. There were 164,644 foreclosure filings reported in June.

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eFinanceDirectory

According to the latest quarterly survey released by the National Association of Realtors (NAR), total existing home sales have fallen dramatically compared to last year, and the national median home price is down as well.

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