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To: Bucky Katt who wrote (12492)	6/23/2003 1:40:36 PM
From: James Strauss	Read Replies (1) \| Respond to of 13094

Jim, new stats indicate mortgage foreclosures are up to a record rate (1.2%) whilst mortgage delinquencies are down a bit... Funny, when things are so good with low rates and all, and foreclosures are breaking records.. Must be a lesson in there somewhere? William: The low interest rate environment has been the engine for the housing market... Rising unemployment puts a ceiling on this growth as potential home buyers delay their purchase decisions if there is any question about their employment status in the coming months... In the next 12 months we'll have an interesting dynamic of rising interest rates with an improving employment picture... Whether or not this will be enough to keep the housing market from deteriorating remains to be seen... My guess is that long term mortgage rates up to about 10% in a growing economy should not hurt the housing market... Above 10% you begin to see a drop off in demand... The key will be the employment picture... Even at 6.1% unemployment is historically better than past recessions... We know that rates are going to go up... The government will do everything it can to grow jobs... If they fail in this the housing market will contract... Jim