LOS ANGELES, July 16, 2008
Housing Industry Continues To Sour
Home Builders' Confidence Hits New Low; SoCal Home Prices Drop Almost 30% In June
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Play CBS Video Video Feds Press For Housing Bill Fed chief Ben Bernanke called upon Congress to pass a housing bill that would help struggling homeowners and rescue ailing mortgage lenders. Anthony Mason reports.
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The Early Show Hitting Home Stories, video, resources and expert advice for homeowners facing foreclosure.
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The National Association of Home Builders/Wells Fargo housing market index fell in July to a record low of 16, down from 18 in June, the Washington trade group said Wednesday.
The index has been on a downward trajectory since May as the industry's fortunes have soured.
Tighter lending standards, rising mortgage defaults and fear about the housing market's future have sidelined buyers, stinging major builders like D.R. Horton Inc., Pulte Homes Inc. and Centex Corp.
"Builders are reporting that traffic of prospective buyers has fallen off substantially in recent months," David Seiders, NAHB's chief economist, said in a statement.
On a vacant lot in northern New Jersey, Dean Mon is breaking ground for a 70-unit housing complex. But he tells CBS News correspondent Anthony Mason that he is worried he will be able to find buyers.
That's why builders like Mon are begging Washington to pass the housing bill.
"We need Congress's help," Mon says.
To stimulate sales, the bill would provide a temporary tax credit of up to $8,000 for first-time buyers and allow the government to insure $300 billion in new mortgages to help 400,000 strapped homeowners, Mason reports.
Sales of new homes fell 2.5 percent in May, while home prices were down 5.7 percent from a year earlier, the Commerce Department said last month.
Meanwhile, Southern California home prices plunged 29.3 percent in June compared to a year ago, according to DataQuick Information Systems. DataQuick said the median price for new and resale homes and condominiums stood at $355,000 last month in a six-county region, down from $502,000 in June 2007.
The latest home builder report reflects a survey of almost 400 residential developers nationwide, tracking builders' perceptions of current market conditions and expectations for home sales over the next six months.
Index readings higher than 50 indicate positive sentiment about the market. The seasonally adjusted index has been below 50 since May 2006.
Respondents gave dour assessments of current sales, prospective home buyer traffic and sales expectations in the months ahead, sending the index for each to new lows.
Builders' business outlook for the South, West and Midwest worsened, but improved slightly in the Northeast.
Meanwhile, the NAHB seized on Wednesday's data to renew its calls for lawmakers to include an $8,000 tax credit for first-time home buyers in a housing stimulus package being considered in Congress.
The association contends that would help stabilize the faltering housing market.
Despite the grim housing outlook, Federal Reserve Chairman Ben Bernanke told Congress Wednesday that troubled mortgage giants Fannie Mae and Freddie Mac are in "no danger of failing."
Though Bernanke delivered the same somber economic report to the House as he did Tuesday to the Senate, he tried to tamp down growing panic by stressing that like all economic downturns, this too shall pass, reports CBS News correspondent Bob Fuss.
The Fed chief made his remarks to the House Financial Services Committee, his second day on Capitol Hill where he briefed lawmakers on the problems plaguing the economy.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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- HERE''S MY SOLUTION.
Go to www.congress.org . Enter your ZIP+4 to get a list of YOUR elected representatives.
CLICK ON EACH NAME, and check the rep''s bio.
VOTE AGAINST anyone who was born 1946-1957.
CLEAN OUT THE BABY BOOMERS. SIXTEEN YEARS OF BABY BOOMER GOVERNMENT HAS BEEN A DISASTER.
SIXTEEN YEARS IS ENOUGH! - Reply to this comment
- Fannie and Freddie shares have declined by about 80 percent this year. The slump in the two mortgage agencies has sparked a new catchphrase -- ``Too Chinese to Fail'''''''' -- based on the $974 billion of U.S. agency debt held by foreign investors, a fivefold increase since 2003.
Financial markets and U.S. legislators alike have derided U.S. Treasury Secretary Henry Paulson''''s plan to bail out the mortgage lenders. One of the two key elements is illogical, while the second is plain outrageous.
Just last week, Fannie Mae said it ``has access to ample sources of liquidity, including access to the debt markets.'''''''' Freddie Mac said it was ``adequately capitalized, highly liquid and an essential part of the nation''''s housing system.'''''''' Either they are being economical with the truth, or the decision to let them borrow from the Federal Reserve''''s discount facility is window-dressing that serves no real purpose.
Defending the Indefensible
Worse is the scheme to allow Paulson to dip into the nation''''s tax revenue to purchase shares in Fannie and Freddie -- shares that investors have already deemed to be almost worthless. If the mortgage lenders can''''t survive in their current form, the government shouldn''''t be defending the indefensible.
In April, Standard & Poor''''s said the risk that the U.S. would have to prop up its so-called Government Sponsored Enterprises posed a bigger threat to the country''''s AAA rating than its willingness to underwrite securities firms. - Reply to this comment
- Housing Industry Continues To Sour:
Subsidize the sugar cane industry. Sprinkle it with
corn starch and bio fuel''s. And get those dang lobbies est to donate - Reply to this comment
- Post by ibsteve2u Right on.
but its one thing if bush the dum-basz tells the people lies, its a whole nother when citizens actually believe him, and have paid no attention to the facts or any media investigation, but are so partisan sheep they''ll vote for a GOP''r no matter how bad they are. - Reply to this comment
- I''m going to get annoyed when this caricature of a President yet again blames Congress for not solving something he and the Republican Congress created when they changed the bankruptcy laws and lead the financial industry to believe that anything goes....
- Reply to this comment
- My what shocking news. Positively riveting, whot?
- Reply to this comment
- When Stanley Kubrick and Peter Sellars created the charactor Dr Strangelove, no one ever thought anyone would ever emerge in real life to emulate the fictional crackpot. Well! what do you know, we have witnessed over the last eight years a loony to beat all loonies. His name is George W Bush and he ''aint actin'' he is for real !
- Reply to this comment
- And when you do get some edumacation, thank the liberals who designed, built and continue to protect this country from those fans of fear, stagnation, paranoia and do-nothings known as conservatives.
Posted by andor3
Now really, paranoid? fearful? Bush made the observation that not all poor people are killers. Just because a person is poor said Bush, doesn''t necessarily make them a killer.
Bush did this country a favor. Bush exposed the intellectual and personality autism of the right wing conservative with everyone but themselves. The weasels hiding behind the curtain running the great OZ blowing fire and smoke. - Reply to this comment
- In 1958 (50 years ago, for those of you with Government Educations), the US was two years into a housing slump, caused by a government crackdown on easy mortgage terms with no upfront money from buyers. The concern was that easy terms were creating a "housing bubble" that would burst with massive foreclosures on the part of under qualified buyers. Unemployment was over 7% and the nation was in the middle of a recession. Gasoline was 29 cents a gallon, the average income in the US was $5,087 per year, and the average price of a house was $12,750. Iraq became a republic after a military coup and the infamous Nikita Khrushchev became Premier of the Soviet Union.
This is not the Apocalypse, or even a really significant period in US history - it''s just Groundhog Day. - Reply to this comment
- "... look at reality, shall we? The LIBS CONTROL ...[blah blah]"
reality check yes. no group is in control of either house of Congress and certainly not everything, despite your paranoia. Check the numbers, do the math, read a book.
And when you do get some edumacation, thank the liberals who designed, built and continue to protect this country from those fans of fear, stagnation, paranoia and do-nothings known as conservatives. - Reply to this comment
- I''m not sure there''s anything wrong with the electoral process although it could be improved with email voting. I thought it was interesting when my classmates were taking out loans, grants, etc. I paid for my education so I feel like I own it, and recommend that anyone else do so too.
- Reply to this comment
- Maybe, if we wanted a healthier better America we should turn to God to heal our land?
Posted by LOOK________ at 11:26 P
Religion is the problem, not the solution.
It''s the religious right that kept bush in office for the past eight years. Without you people, he could never have done the damage he has done. You should be ashamed. - Reply to this comment
- It''s not the Democrats. It''s not the Republicans. It''s
SIXTEEN YEARS OF BABY BOOMERS.
Slick Willy is a Boomer. Dubya is a Boomer. Hillary is a Boomer. Arnold Schwarzenegger is a Boomer. Joseph Hazelwood is a Boomer. 60% of Congress are Boomers. - Reply to this comment
- i8c6 responded
Some of them for sure but some of their kids are worse.
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Then don''t vote for anyone born after 1964, either. That''s when the first Boomers turned 18, and they might have started having babies that year.
Back then, VERY FEW girls got pregnant before age 18. - Reply to this comment
- SistaTee wondered
Who could have guessed?
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Apparently not the Clintons. Hillay says they had NO IDEA that globalization could hurt our economy. They thought it would open a "dragon of demand" in the rest of the world, and they''d all be BUYING THINGS FROM US!!!
If, that is, you believe ANYTHING THAT LYING WITCH SAYS... - Reply to this comment
- GET RID OF THE BOOMERS, AND LOOK AT ALL THE PROBLEMS YOU SOLVE.
Posted by txgrouch2006
Some of them for sure but some of their kids are worse. - Reply to this comment
- i8c6 wrote
If only it were that easy.
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Does THIS make it any easier?
OVER 60% OF THE MEMBERS OF CONGRESS ARE BABY BOOMERS!!
Slick Willy is a Boomer. Dubya is a Boomer. Hillary is a Boomer. Arnold Schwarzenegger is a Boomer. Joseph Hazelwood is a Boomer.
GET RID OF THE BOOMERS, AND LOOK AT ALL THE PROBLEMS YOU SOLVE. - Reply to this comment
- What a pity. The 7-yr olds in India that took all our jobs aren''t building any homes in the United States. Who could have guessed?
- Reply to this comment
- Why did you do this to us nutjobs?
Not only us of course, but really the whoe world.
Who''s prospering on boosh''s and the republiconvicts failures? China and the mid-east.
Mission Accomplished. - Reply to this comment
- Glad I don''t on one of these things now. The benefits of an American house in 2008 are WAY over exaggerated.
- Reply to this comment
Best-selling author Mitch Albom on his first nonfiction work since "Tuesdays with Morrie."
