The housing slump may not be over after all. As many as 1.5 million more families may lose their homes, another 100,000 people in housing-related industries may lose their jobs and 100 more sub-prime lenders may go under, according to estimates by Realtors, economists, analysts and a Federal Reserve governor, Bloomberg News said.
More than half of U.S. home sales traditionally are made in the spring. But the season has been so slow, the National Association of Home Builders now predicts purchases will fall for a sixth quarter in a row.
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At least 24 of the nation’s more than 8,000 mortgage lenders have been forced to close or sell since the start of 2006. Doug Duncan, chief economist of the Washington-based Mortgage Bankers Association, has predicted that more than 100 home lenders may fail this year.
“The correction will last another year,” Mark Zandi, chief economist for Moody’s Economy.com in West Chester, Pa., told Bloomberg. That would match the pattern of the last housing slump.
U.S. home sales fell 45 percent in the 1991 slump, which sparked a recession in which 1.1 million American jobs or 1 percent of the work force lost their jobs, said Robert Kleinhenz, deputy chief economist of the California Association of Realtors.
As of January, the latest month for which data are available, home sales had fallen 28 percent from September 2005 levels. The jobless rate is near a 5-year low, but nearly 2,000 mortgage-related jobs were lost in January alone.
