Thursday, July 5, 2012
Tim Duy — What Are We Expecting From Housing?
My take is that Tim Duy gets this one more right that Bill McBride (Calculated Risk). This is a balance sheet recession, bordering on a depression. Dr. Housing Bubble is also in agreement — the chief determinant of the housing market is, of course, demand, and demand is a function of affordability, i.e., price to income, as well as rate of price change. Banks were lending more on less than satisfactory income based on quickly moving prices, extending credit more liberal than normal. That's over as long as deleveraging goes on, and there is no indication that consumers' balance sheets are yet in decent shape. It's not even a sure thing that the bottom is in yet.
Read it at Tim Duy's Fed Watch
What Are We Expecting From Housing?
by Tim Duy