Home builders will have to wait until 2009

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Reuters reports (ty: Calculated Risk) that Standard & Poors doesn’t see a rebound in the home builder market until 2009 – especially if the subprime meltdown spreads to alt-a and prime segments of the market.

We do not expect to see a recovery for most rated home builders until 2008, under the best of circumstances," the rating agency said in a research note. "In fact, a rebound could easily slide into 2009 if a subprime contagion spreads to the Alt-A and prime products."

Which begs the real question: WHEN ARE THEY GOING TO STOP SAYING IF? I mean, seriously – there is plenty of evidence that shows that Alt-A is already getting hammered (ty: HousingPANIC) on Wall Street. If you don’t believe me you can ask the owners of Opteum all about it.

Additionally, prime is just getting started. We’re going to see a big increase in defaults coming up here as these prime ARMs (remember interest only and pay option loans to people with great credit are still in these credit buckets) start to explode on people. As I’ve always said "Your FICO score will not make your mortgage payment for you."