Tuesday, May 02, 2006

Houston Foreclosures Triple In Three Years

The Houston Business Journal has this update. "Houston is positioned to escape most of the negative economic consequences that a number of housing markets throughout the nation will feel as a result of a predicted correction of the nation's housing market, a Houston economist said Tuesday."

"During his annual real estate symposium, University of Houston economist Barton Smith pointed to excessively high prices and extremely low affordability in about a quarter of the nation's housing markets as well as a dangerous rise in sub-prime lending that is already producing high levels of foreclosures."

"He pointed out that local foreclosures are three times higher than they were just three years ago."

"The economist hopes there is only one more quarter-point rise before the Fed pauses for the rest of this year."

"'We have now finally reached the point where further interest rate hikes could really get the housing market correction going,' Smith said. 'Already, home sales are weakening. Bringing the housing market back down to earth slowly is going to require real finesse, perhaps a level of monetary fine-tuning that is beyond the Fed's abilities, especially at a time when they are preoccupied with the inflationary implications of high energy prices.'"


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