The Economy’s Savior Turns Into Its Anchor>“It is somewhere to live; but a home is also, for many folk, a valuable asset. No wonder people love talking about house prices over the dinner table. In this economic recovery, however, homes have done much more than shelter people from wind and rain. They have helped to shelter the whole world economy from deep recession.” —The Economist, March 30, 2002

Four Five years later…
“June is National Homeownership Month in America. National Foreclosure Month would be more apt. Some corners of the mortgage market—notably “subprime” loans aimed at those with poor credit records—have a nasty case of dry rot. One subprime borrower in eight is behind with the payments. As the introductory “teaser” rates on more loans expire and monthly payments outrun the means of more borrowers, hundreds of thousands of Americans are set to be thrown onto the street.

Only a few weeks ago you could find voices claiming that the worst was over for America’s sagging housing market. That is harder now. Although it is too soon to be truly gloomy about the broader economy, any structural surveyor would spot tightening credit and a glut of housing supply. The foundations are not much better: falling house prices are no good for consumer spending, which has been propping the economy up…”—The Economist, March 22, 2007