Prepared by Global Insight for The United States Conference of Mayors
November 26, 2007
_Global Insight // Highlight_
(http://www.globalinsight.com/Highlight/HighlightDetail11078.htm)
Using Global Insight's proprietary databases and extensive housing analyses,
the report for the U.S. Conference of Mayors, "The Mortgage Crisis: Economic
and Fiscal Implications for Metro Areas," examines the effects of the housing
recession and mortgage crisis on the economic growth prospects for 361 of
the nation's metropolitan areas. Weak residential investment, lower spending
and income in the construction industries, as well as curtailed consumer
spending resulting from decreased home equity will have "multiplier effects"
on the
nation's economy. Other report findings include:
* The foreclosure crisis alone will reduce home values by an additional
$519 billion in 2008, bringing the total forecast of lost equity for the
nation's homeowners to
$1.2 trillion.
* In 2008, the economy will grow at a rate of 1.9%, a full percentage
point lower than would have been the case without the mortgage crisis.
* Foreclosures will increase by at least 1.4 million in 2008; these
homes represent a market value of $316 billion.
* In 10 states, representing a cross section of the United States, the
aggregate loss in tax revenue will equal $6.6 billion.
* Home price declines across the United States will average 7% in 2008,
ranging as high as 16% in California.
* Consumer spending will slip to 2.0% growth, well below a 3.1% gain in
incomes.
* Housing starts will continue to decline until the second quarter of
2008, when the annual rate of housing starts will be less than 1 million.
* Sales of existing homes also will continue to fall, by another 10% in
2008.
Full Study:
_The Mortgage Crisis: Economic and Fiscal Implications for Metro Areas_
(http://www.globalinsight.com/Scripts/registrationForm.cfm?ID=100)
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