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It's official: The housing crisis that began in 2006 and has recently entered a double dip is now worse than the Great Depression.

Prices have fallen some 33 percent since the market began its collapse, greater than the 31 percent fall that began in the late 1920s and culminated in the early 1930s, according to Case-Shiller data.

The news comes as the Federal Reserve considers whether the economy has regained enough strength to stand on its own and as unemployment remains at a still-elevated 9.1 percent, throwing into question whether the recovery is real.

"The sharp fall in house prices in the first quarter provided further confirmation that this housing crash has been larger and faster than the one during the Great Depression," Paul Dales, senior economist at Capital Economics in Toronto, wrote in research for clients.

According to Case-Shiller, which provides the most closely followed housing industry data, prices dropped 1.9 percent in the first quarter, a move that the firm interpreted as a clear double dip in prices.

Moreover, Dales said prices likely have not completed their downturn.

"The only comfort is that the latest monthly data show that towards the end of the first quarter prices started to fall at a more modest rate," he said. "Nonetheless, prices are likely to fall by a further 3 percent this year, resulting in a 5 percent drop over the year as a whole."

Prices continue to tumble despite affordability, which by most conventional metrics is near historic highs.

The rate for a 30-year conventional mortgage is around 4.5 percent, just above the historic low of 4.2 percent in October 2010. The ratio measuring mortgage costs to renting is 7 percent below its norm, while the price-to-income ratio is 23 percent below its average, Dale said.

Yet other factors are constraining the market.

After the fallout from the subprime debacle, in which millions lost their homes when they defaulted on loans they could not afford, banks changed underwriting standards.

More than four in every five mortgages now require a down payment of 20 percent, and credit history standards have tightened. At the same time, foreclosures continue at a brisk pace, pushing more supply onto the market and pressuring prices downward.

Then there is the issue of underwater homeowners—those who owe more than their house is worth—representing another 23 percent of homeowners who cannot leave or are in danger of mortgage default.

Indeed, the foreclosure problem is unlikely to get any better with 4.5 million households either three payments late or in foreclosure proceedings. The historical average is 1 million, according to Dales' research.

Ibanez wrote:Perhaps a world war could pull us out.


Or maybe, just maybe, we can evolve and learn from our mistakes. We can't keep on borrowing.

travelinman67 wrote:It's official:

US Housing Crisis Is Now Worse Than Great Depression

Tuesday, 14 Jun 2011
By: Jeff Cox

http://www.cnbc.com/id/43395857

It's official: The housing crisis that began in 2006 and has recently entered a double dip is now worse than the Great Depression.

Prices have fallen some 33 percent since the market began its collapse, greater than the 31 percent fall that began in the late 1920s and culminated in the early 1930s, according to Case-Shiller data.

The news comes as the Federal Reserve considers whether the economy has regained enough strength to stand on its own and as unemployment remains at a still-elevated 9.1 percent, throwing into question whether the recovery is real.

"The sharp fall in house prices in the first quarter provided further confirmation that this housing crash has been larger and faster than the one during the Great Depression," Paul Dales, senior economist at Capital Economics in Toronto, wrote in research for clients.

According to Case-Shiller, which provides the most closely followed housing industry data, prices dropped 1.9 percent in the first quarter, a move that the firm interpreted as a clear double dip in prices.

Moreover, Dales said prices likely have not completed their downturn.

"The only comfort is that the latest monthly data show that towards the end of the first quarter prices started to fall at a more modest rate," he said. "Nonetheless, prices are likely to fall by a further 3 percent this year, resulting in a 5 percent drop over the year as a whole."

Prices continue to tumble despite affordability, which by most conventional metrics is near historic highs.

The rate for a 30-year conventional mortgage is around 4.5 percent, just above the historic low of 4.2 percent in October 2010. The ratio measuring mortgage costs to renting is 7 percent below its norm, while the price-to-income ratio is 23 percent below its average, Dale said.

Yet other factors are constraining the market.

After the fallout from the subprime debacle, in which millions lost their homes when they defaulted on loans they could not afford, banks changed underwriting standards.

More than four in every five mortgages now require a down payment of 20 percent, and credit history standards have tightened. At the same time, foreclosures continue at a brisk pace, pushing more supply onto the market and pressuring prices downward.

Then there is the issue of underwater homeowners—those who owe more than their house is worth—representing another 23 percent of homeowners who cannot leave or are in danger of mortgage default.Indeed, the foreclosure problem is unlikely to get any better with 4.5 million households either three payments late or in foreclosure proceedings. The historical average is 1 million, according to Dales' research.

biobengal wrote:"The New Great Depression"?

LOL! I'm embarrassed for the real Great Depression.

I'm sorry your house lost value but it wasn't real...

OpieGSU wrote:Well you can always hope, travelindouche.
What are you so hysterical about? While it's by no means great right now, the economy is in way better shape than it was when Bush handed it over to this President.

OpieGSU wrote:Well you can always hope, travelindouche.
What are you so hysterical about? While it's by no means great right now, the economy is in way better shape than it was when Bush handed it over to this President.

OpieGSU wrote:Well you can always hope, travelindouche.
What are you so hysterical about? While it's by no means great right now, the economy is in way better shape than it was when Bush handed it over to this President.

OpieGSU wrote:How quickly they forget. The economy was on the verge of complete collapse when Obama took over. As I said it's not great now, but t's far more stable than it was in January 2009.
When Obama took over, banks were collapsing left and right, the auto industry was about to go under, and the Dow was below 8,000.
Unemplyment is still way too high, but at least things have stabilized for the most part. You can pick and choose whatever bad econo ic indictor you want, but the fact of the matter is that the overall picture is better than it was when this president took office.

AZGrizFan wrote: Gas prices
Inflation
Consumer Confidence
Business confidence
Dollar devaluation
QE-I and QE-II abortions
Housing values
Housing starts
Housing sales
foreclosure rates
Unemployment rate
First time unemployment benefits requests
national debt
budget deficit
out of control government spending
three-front war
balance of trade
342 bank failures ($465 BILLION in assets)

OpieGSU wrote:

AZGrizFan wrote: Gas prices
Inflation
Consumer Confidence
Business confidence
Dollar devaluation
QE-I and QE-II abortions
Housing values
Housing starts
Housing sales
foreclosure rates
Unemployment rate
First time unemployment benefits requests
national debt
budget deficit
out of control government spending
three-front war
balance of trade
342 bank failures ($465 BILLION in assets)

90% of those issues are inhereted problems from Bush, and most are headed in the right direction. The wars? all bush. trade imbalance? bush. deficits? same under Bush? Consumer confidence? Bush. The housing crisis? Bush. The stock market crashing? Bush Dollar devaluation? Bush.
The recovery just isn't fast enough for you.It takes time. You can bitch and moan all you want, but the policies the president instituted following his inauguration, probably averted an actual depression. You may not like every individual decision made, but you must admit that the steady hand of the president and his advisors stabilized an absolute cluster fvck of a situation that Bush got us into. Three years into his presidency, considering the circumstances under which he was sworn in, I'd say the president is doing a decent job managing the economy. Could it be better? Of course. But this mess didn't happen overnight, and it won't be fixed overnight.
Most of those idicators are headed in the right direction. The fact that you actually blame this president for the wars is absurd. If he had pulled out when he was sworn in, you rubes would be labeling him a cut and run coward.
This president is thoughtful, pragmatic, and he seeks common ground with the other side. QUite frankly that is a huge breath of fresh air given the constant demigougery of the republicans. This thread is a perfect example of that. Great depression 2 in 2011. Pluuease. Don't be so melodramatic.

OpieGSU wrote:

AZGrizFan wrote: Gas prices
Inflation
Consumer Confidence
Business confidence
Dollar devaluation
QE-I and QE-II abortions
Housing values
Housing starts
Housing sales
foreclosure rates
Unemployment rate
First time unemployment benefits requests
national debt
budget deficit
out of control government spending
three-front war
balance of trade
342 bank failures ($465 BILLION in assets)

90% of those issues are inhereted problems from Bush, and most are headed in the right direction. The wars? all bush. trade imbalance? bush. deficits? same under Bush? Consumer confidence? Bush. The housing crisis? Bush. The stock market crashing? Bush Dollar devaluation? Bush.
The recovery just isn't fast enough for you.It takes time. You can bitch and moan all you want, but the policies the president instituted following his inauguration, probably averted an actual depression. You may not like every individual decision made, but you must admit that the steady hand of the president and his advisors stabilized an absolute cluster fvck of a situation that Bush got us into. Three years into his presidency, considering the circumstances under which he was sworn in, I'd say the president is doing a decent job managing the economy. Could it be better? Of course. But this mess didn't happen overnight, and it won't be fixed overnight.
Most of those idicators are headed in the right direction. The fact that you actually blame this president for the wars is absurd. If he had pulled out when he was sworn in, you rubes would be labeling him a cut and run coward.
This president is thoughtful, pragmatic, and he seeks common ground with the other side. QUite frankly that is a huge breath of fresh air given the constant demigougery of the republicans. This thread is a perfect example of that. Great depression 2 in 2011. Pluuease. Don't be so melodramatic.

OpieGSU wrote:This article illustrates my points far better than I ever could.
I defer to it. Do yourself a favor and read up. You might actually learn something if you took a second to open your mind, instead of spewing this BS hysteria that Obama is some sort of antichrist president. The guy inherited a shit economy from your guy, Bush. I'd give obama a B- at this point. We'll see where we are in a year after his 1st term is complete. I swear even liberals like me were never this demagogic about GW Bush, and he fvckin started a war on false pretenses for christ's sake!!!
http://www.huffingtonpost.com/james-kwa ... 53642.html

citdog wrote:

OpieGSU wrote:This article illustrates my points far better than I ever could.
I defer to it. Do yourself a favor and read up. You might actually learn something if you took a second to open your mind, instead of spewing this BS hysteria that Obama is some sort of antichrist president. The guy inherited a **** economy from your guy, Bush. I'd give obama a B- at this point. We'll see where we are in a year after his 1st term is complete. I swear even liberals like me were never this demagogic about GW Bush, and he fvckin started a war on false pretenses for christ's sake!!!
http://www.huffingtonpost.com/james-kwa ... 53642.html

huffington post


this rube has a lot to learn