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The dismal state of the housing market was mentioned yesterday by CBS' Anthony Mason and CNBC's Erin Burnett as a factor in the decline in stock market prices. Now Mason and Burnett's CNBC colleague Diana Olick take a look at real estate per se as monthly sales of existing homes slowed to their lowest rate in more than four years. "It is the fourth straight month of declining sales," Mason warned, even as delinquent payments increase among homeowners with good credit ratings and foreclosures spike, especially in southern California, among borrowers with adjustable rate mortgages. CNBC's Olick explained that a new factor in declining purchases is that would-be buyers are finding it harder to obtain a mortgage. New home sales are expected to be no more robust than those of existing homes she added: "Housing, it seems, has yet to hit bottom."
So CBS had Mason reappear later in the newscast to kick off a three-part series Real Estate, Real Solutions. Despite the current slump in the housing market, a decade-long run-up has still accounted for an 85% increase in property prices. The upshot is that expensive homes force many first-timers to purchase beyond their means with no-money-down adjustable-rate loans. Mason's advice is to apply the 33% rule--if all housing costs, including the mortgage, insurance and taxes, account for more than one third of one's income, do not buy.
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