Industry News

Worst-case scenario for housing next year

Part 2: 2006 real estate forecast

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Editor's note: This is the second part of a two-part story looking at housing market conditions for 2006. To read the first part, "Best-case scenario for housing next year," click here. The scene opens on a devastated landscape, with the voices of a thousand wannabe homeowners crying out in pain. Congress has enacted limitations on mortgage-interest deductions; interest rates have hit 8 percent; creative loan products have been curtailed; investors have fled to the stock market and first-time buyers can't afford a house. At least, that's the worst-case scenario for 2006, according to various possibilities suggested by experts and industry observers consulted by Inman News. Though different folks painted the future with different strokes, one theme was consistent: interest rates will be the most important factor affecting the industry in 2006. And, though the sign of the beast is 666 in the Bible, the bad-luck number for mortgage interest rates is 8 percent, a number of experts said. ...