Industry News

NAR on subprime: ‘Be mindful of overcorrection’

Realtor group says subprime fallout will harm sales

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Problems in the subprime loans market and a tightening of underwriting standards may cause total home sales to fall by about 100,000 to 250,000 across the country -- or up to 3 percent per year during the next two years, according to the chief economist for the National Association of Realtors trade group. "Foreclosures are increasing inventories in certain local markets. The projected flood of foreclosures are problematic and will add to the already loose housing supply in some local markets," NAR economist David Lereah said in a statement, "but these local markets are exhibiting healthy economic activity, enabling them to be able to absorb increases in foreclosures. "From a broader perspective, today's subprime problems are occurring against a backdrop of cyclically low mortgage rates and a growing, healthy economy. Jobs and liquidity are plentiful in the marketplace, suggesting that the subprime problems may be a manageable problem within our $10 trillion-plus economy," he stated. "...