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Tuesday, February 13, 2007

What Happened Yesterday

Yesterday in mortgages we saw the "break" that constituted the transmission of the near-depression in housing in many areas to the financial markets that lend to consumers for housing. There are a number of break-point markers.
Tightening underwriting standards (largely focused on first time home buyers) mean that rosy projections for home sales in 2007 are unrealistic. You cannot cut into the supply of credit without cutting into the supply of home buyers. This is a needed correction, but it will cause problems - especially in the west.

A symposium of sorts on the developments in housing and housing-related finance is taking place at Calculated Risk. There is no other place on the web that I know of that provides such a wide-ranging and balanced discussion. There are knowledgeable participants in a wide range of fields providing input and data. It's a remarkable resource.

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