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Tuesday, July 10, 2007

U.S. Housing Sales to Tumble to Six-Year Low on Rates

" U.S. home sales in 2007 will drop to their lowest level since the start of the five-year housing boom in 2001 as mortgage rates and foreclosures increase, according to a forecast by Freddie Mac.

Sales of new and previously owned homes probably will total 6.28 million, down 7.1 percent from last year, according to the world's second-largest mortgage buyer. It would be the lowest since 6.20 million homes were sold in 2001. Residential lending will drop to $2.75 trillion, the lowest since 2002, the McLean, Virginia-based company said in today's forecast. "

Some things to consider about 2001:
1) Tech bubble had burst and the damage was winding its way through the economy.
2) September 11th was a significant blow to already vulnerable U.S. consumer confidence.

The worst is still to come in this housing market...

Source: U.S. Housing Sales to Tumble to Six-Year Low on Rates (Update3) (http://www.bloomberg.com/apps/news?pid=20601010&sid=aH3.IwJhFk_w&refer=news)