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September 26, 2007

Recession chances keep ticking upward

As housing problems keep ballooning.
The U.S. supply of unsold homes ballooned to an 18-year high in August as sales fell to a five-year low and prices were up just 0.2%, according to the National Assn. of Realtors.

”The good news is that the housing market did not collapse in August. Sales took a hit, and inventory increased, but houses, nonetheless, sold,” said Patrick Newport, an economist with research firm Global Insight.

”The bad news,” he added, “is that the worst may be just ahead. August’s sales do not reflect the full impact of the credit crunch.”

August, hell. Try July 2008. That’s when the rate of resets for adjustable-rate mortgages finally peaks. We’re nowhere near the bottom of this well yet.

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