SubPrime Housing

The following article from MarketWatch is good and bad news. Bad in that the housing market is still feeling the affects of the subprime fiasco but good in the fact that the glut of housing will start winding its way down. Sure people should not have bought houses they couldn't afford but the primary blame lies with the mortgage and financial institutions that offered loans with no down payments, no credit check, and no income verification. Now some of those same institutions are being bailed out by China and oil rich Gulf states; Saudi Arabia, Kuwait, Bahrain, Qatar, UAE, and Oman. Have we mortgage our souls to the devil?

From MarketWatch -

The gruesome figures show builders are cutting back on production at a furious pace to try to work off a large backload of unsold homes. The bad news is that housing is still contracting; the good news is that the sooner builders stop adding supply to overbuilt markets, the sooner the housing market can recover.
Compared with December 2006, monthly housing starts were off 38%, the biggest year-over-year decline since 1980.
In December, single-family starts fell 3% to 794,000, the lowest monthly pace in 16 years.
Building permits, a better gauge of future activity than the volatile monthly figures on starts, fell 8% in December to a seasonally adjusted annual rate of 1.07 million, the lowest since May 1993. Single-family permits fell 10% in December to 692,000.
For all of 2007, housing starts fell 25% to 1.35 million, the lowest total since 1993. Building permits fell 25% in 2007 to 1.38 million, the lowest since 1995.
Single-family permits fell 29% in 2007 to 1.05 million, the lowest since 1992.
Housing completions dropped 8% in December to a seasonally adjusted annual rate of 1.30 million. Completions fell 24% in 2007.