Mr Market to put last nail in Bush's coffin:
Apartment Glut Forces Owners to Cut Rents in Much of U.S. by DAVID LEONHARDT, NY Times
But the declines are also a worrisome sign that the nation's housing market has begun to suffer from some of the same problems of oversupply that have already hurt manufacturers, economists say. If mortgage rates continue increasing, as is widely expected, people who might have bought houses will instead rent. That could shift the burden of the excess supply from landlords onto homeowners, hastening the end of a decade of rapidly rising house prices.
"You're going to take the one bright light in the economy, and it will dim," said Mark Zandi, chief economist of Economy.com, a research company. "It's just a question of how much."
Housing analysts say that offers like these have caused a spike in home foreclosures, because some new owners have lacked the financial cushion to withstand a job loss, illness or divorce and still make their mortgage payments.
But the biggest drag on rents, developers say, is the sharp increase in the number of Americans who own their homes. Low interest rates have played a big role in that increase, but so has the willingness of many banks and the giant mortgage lenders, Fannie Mae and Freddie Mac, to accept little or no down payment from families who once would have been renters.
nytimes.com
The Bush administration's desperate attempt to stimulate the economy by printing and debasing the currency has run out of steam. The money supply has been contracting for the last few months and mortgage lending standards have been lowered to allow financially unqualified buyers to buy houses which they will easily loose. With interest rates rising and the dollar tanking the stock market is standing on its feeble last leg of this bear market rally. As Mr Market seeks fair value at much lower prices voters will focus on Bush's negatives, of which, there are many.
Sell apartment REITs, buy BEARX, PSAFX, and PCRAX. |
