Circling-the-Drain report: The U.S. housing market

[marmar]

Home Sales, Durables Orders Probably Fell: U.S. Economy Preview

By Bob Willis

Sept. 21 (Bloomberg) -- U.S. home sales and orders for long-lasting goods probably fell in August, indicating growth had already slowed heading into the latest financial meltdown, economists said before reports this week.

Combined sales of new and existing homes dropped to a 5.45 million pace last month, down 1.2 percent from July, according to the median estimate of economists surveyed by Bloomberg News. Orders for durable goods, products meant to last several years, probably fell 1.8 percent.

``There was a fairly significant slowdown in progress even before we got to the financial fireworks,'' said Brian Bethune, director of financial economics at Global Insight Inc. in Lexington, Massachusetts.

The three-year housing slump that precipitated the subprime crisis, triggering losses that brought down giants such as Lehman Brothers Holdings Inc. and American International Group Inc., may spell the end of the economic expansion. Consumers are unlikely to benefit immediately from federal efforts to shield financial firms from tainted assets.

``The government's bailout plan may be great for investors, but it doesn't do much for the economy over the near-term,'' said Russell Price, a senior economist at H&R Block Financial Advisors in Detroit. ``Consumers are still going to find financing everything from homes to big-ticket appliances tough to come by.''

The National Association of Realtors' report on home resales is due Sept. 24. Purchases declined to a 4.94 million annual pace from 5 million in July, according to the survey median. Sales reached a 4.85 million pace in June, the fewest since comparable records began in 1999. ......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=a2lt3XJ0lqN0&refer=home

[mmonk]

1. The one good thing about a bailout of Fannie Mae and Freddie Mac

will be lower and more controlled interest rates on loans which if there is any chance of recovery in the market, is the best remedy.