commissioner.org
| Source | Jim Devine |
| Date | 05/06/25/23:42 |
| Housing markets show signs of bust: Fannie
By Robert Schroeder, MarketWatch Last Update: 4:12 PM ET June 24, 2005 WASHINGTON (MarketWatch) -- The possibility of a housing bust has "risen sharply in certain parts" of the U.S., thanks to a number of conditions including easier lending standards, a Fannie Mae executive said. In a presentation prepared for a National Association of Home Builders meeting May 5, Fannie Mae's (FNM: news, chart, profile) Thomas Lawler said housing-market conditions in many areas mirror past conditions that preceded regional housing busts. Lawler is senior vice president for risk policy at the housing-finance giant. Fannie Mae did not release a copy of Lawler's presentation to the public when it was given. The Wall Street Journal first reported on the 34-slide presentation. The data Lawler presented include material collected by the Federal Housing Finance Board, the Office of Federal Housing Enterprise Oversight and Lehman Brothers, in addition to Fannie Mae. The report noted that no one can tell if a housing bubble exists until after the fact. Lawler said a number of lending patterns over the past year are similar to those seen in the late 1980s, the "boom" of the most recent "boom/bust" cycle. Among those patterns are increased buying by investors, "unrealistically high consumer expectations" that home prices will rise, "creative, riskier financing" for homes and a higher share of adjustable-rate mortgages. Fannie's top economist said that he sees home prices moderating and that there is a chance home sales will decline in some parts of the country in 2006, particularly the Midwest, where some cities have experienced weak job growth. See related story. Economist David Berson said sales of new homes so far this year are nearly 7% higher than a year ago. In his spring and summer mortgage and economic outlook, Berson noted total existing-home sales jumped 4.5% to 7.18 million units in April, a record for both single-family homes and condominiums. The gain is more than 5% above year-ago levels. Robert Schroeder is a reporter for MarketWatch in Washington. |
Copyright (c) 1998, Joongpil Cho