The housing slump will probably last until 2009 and home sales will take a “substantial hit” in the next several months as borrowers struggle to get mortgages, Moody’s Investors Service said.
“The downturn is more severe and more protracted than we had expected,” Joseph Snider, a senior credit officer at Moody’s, said. Home sales will be hurt by the lack of subprime and Alt-A mortgage lending and the difficulty borrowers with good credit are having in obtaining mortgages, Moody’s said in report Monday.
A glut of new and existing homes for sale is prompting potential buyers to wait for prices to fall before purchasing. The Moody’s forecast contrasts with the National Association of Home Builders, which expects housing to begin rebounding in mid-to-late 2008. The worst housing market in 16 years has sent a Standard & Poor’s measure of 16 U.S. home builders down 49 percent this year. The index fell 2.8 percent Monday.
Tags: Alt A Mortgage Market, Home Sales, Housing Market, National Association of Home Builders, Subprime Mortgage
