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A Blown Mortgage reader sent me a copy of a report published in 2004-2005 titled America’s Home Forecast: The Next Decade for Housing and Mortgage Finance (pdf) that portends the continued growth of the US housing market between 2004-2013 at an annualized rate of 5-6% depending on supply/demand issues. This report is a great read to remind us of all the BS that got thrown our way as we approached the crest of the bubble.
We should have known better when we take a closer look at the authors of the report:
Published by the Homeownership Alliance
Written By:
David Berson - Chief Economist, Fannie Mae
David Lereah - Chief Economist, National Association of Realtors®
Paul Merski - Chief Economist, Independent Community Bankers of America
Frank Nothaft - Chief Economist, Freddie Mac
David Seiders - Chief Economist, National Association of Home Builders
See any pumpers on that list?
Out of the 64-pages of bubblicious BS this below is my favorite segment:
No sign of a national home price bubble
There has not been a single year over the past half century in which the national average home value has declined in the U.S. (see Figure 18). This is a period that has included periods of both severe recession and high mortgage rates, or both (as occurred during 1981-1982 when the unemployment rate exceeded 10 percent and mortgage rates reached 18 percent). In fact, the last sustained drop in national average home values occurred during the Great Depression, when the unemployment rate hit 25 percent. With the national unemployment rate below 6 percent, mortgage rates low and economic growth improving, the likelihood of a decline in home prices at the national level is quite remote.
Figure 18
U.S. Home Prices Have Grown Every Year Since 1950
Annual Growth in Nominal Home Values
What do you think - how did we think that the roller-coaster would keep going up?
