Industry News

Forecast: Housing market loses its legs

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Aftershocks from the subprime market disaster will deal another body blow to the already reeling U.S. housing market, though the economy should weather this latest storm without a recession, according to an economic forecast released today. The quarterly Anderson Forecast, produced by the Anderson School of Management at University of California, Los Angeles, reports, "Put bluntly, the credit crunch in the subprime mortgage market will likely trigger a second leg down in the housing market in terms of output and prices." Edward Leamer, forecast director and a professor of economics and statistics at UCLA, said the severity of the subprime meltdown was a surprise since the last forecast was produced. "This thing started in the Midwest, where jobs were weak and prices were weak," he said, and has since mushroomed to national scale. Foreclosures are on the rise, but the more critical issue for the economy is the ability for consumers to purchase homes. "There are sad individual stories ab...