A lot of retailers are hanging on because the broader economic environment is strong, interest rates are low, credit is available, no sector is more dependent on credit. If a recession comes, credit will get cut off both to the consumers and the retailers. That is going to mean a rash of bankruptcies and a lot of lost jobs.

Mark Zandi

Categorized in : Top News

Our economy isn't going to recover until the housing market finds... by Mark Zandi

Our economy isn't going to recover until the housing market finds its footing.

housing-market housing economy

Potential home buyers have a two-step decision process. First, they determine whether they can afford to make a purchase - does their income safely cover their mortgage payment? Then they determine whether owning is a better financial choice than renting - are the costs of owning a home lower than the cost of renting it?

choices home two

No one should expect the value of their house to appreciate quickly - counting on your home to be a significant part of your retirement saving isn't a winning strategy - but it is reasonable to expect that prices generally will rise with at least the rate of inflation for some time to come.

winning home retirement

Predicting recessions is indeed a dark art, but I think we are se... by Mark Zandi

Predicting recessions is indeed a dark art, but I think we are several years away from the next one.

dark art thinking

Housing was ground zero for the Great Recession. Between early 2006 and Obama's inauguration in 2009, average house prices fell by a third across the country. In certain areas, including cities as diverse as Akron, Orlando and Las Vegas, house prices fell by more than half.

vegas zero country

Distressed properties are often vacant and in disrepair, and thus sold at significant discounts. As the share of distressed sales grows, home prices fall.

share home fall

I'm a registered Democrat. by Mark Zandi

I'm a registered Democrat.

If Mr. Trump gets precisely the policies he says he wants, then t... by Mark Zandi

If Mr. Trump gets precisely the policies he says he wants, then the economy will suffer a recession.

economy suffering want

The FHA's success provides strong evidence that government can and should play a role in the nation's mortgage finance system. It also demonstrates that although government intervention in the economy during the Great Recession was messy, things would have been a lot messier without it.

government strong play

The most important point is, in a time of crisis, there is no way out but for the government to be bold and aggressive.

times-of-crisis government important

They called me the sexiest economist in America, and that was years ago, when I had hair and body mass and my teeth were shiny.

hair america years

The upshot of Mr. Trump's economic policy positions under almost any scenario is that the U.S. economy will be more isolated and diminished.

trump economic economy

In a forbearance, the homeowner pays interest and principal on a smaller mortgage, at least for a time, but still owes the full amount. The lower monthly payment helps with affordability, giving stressed homeowners a break.

stressed pay giving

Indeed, the FHA was born out of the Great Depression, which was also caused in significant part by a foreclosure crisis. Mortgages in the early 1930s were mostly three- to five-year 'bullet' loans, which did not amortize and were due in full at maturity.

maturity three years

There is plenty of blame to go around for the U.S. housing bubble, but not much of it belongs to Fannie Mae and Freddie Mac. The two giant housing-finance institutions made many mistakes over the decades, some of them real whoppers, but causing house prices to soar and then crater during the past decade weren't among them.

real mistake past

At the center of every recession is a serious imbalance in the economy and mirrored in the financial system. Think subprime mortgage and the Great Recession, or the technology bubble and the early 2000s recession. There are no such imbalances today.

imbalance technology thinking

There is no better way to quickly buoy hard-pressed homeowners than helping them take advantage of the currently record low fixed mortgage rates and significantly reduce their monthly mortgage payments.

buoys records way

The Obama administration deserves credit for quickly ending the housing free fall. In particular, Obama empowered the Federal Housing Administration to ensure that households could find mortgages at low interest rates even during the worst phase of the financial panic.

phases credit fall

The key to house prices is the share of foreclosure or short sales in the total housing market. When that share rises, house prices will fall, because distressed properties sell for significantly less - currently around 25 percent below non-distressed houses.

keys house fall

An overheating economy, characterized by accelerating inflation and rising interest rates, is another precondition for recession. This doesn't describe today's economy.

rising economy today