Senate Banking Hearing Statements

Here are the statements from the Senate Banking Hearings:

• Dave Seiders, National Association of Home Builders
• Patrick Lawler, OFHEO
• Richard Brown, FDIC
• Tom Stevens, NAR
  

David Seider sees the crash bottoming out middle next year:

The downswing in home sales and housing production should bottom out around the middle of next year before transitioning to a gradual recovery that will raise housing market activity back up toward sustainable trend by the latter part of 2008.

He also acknowledges that prices may drop:

National average house price appreciation is likely to be quite limited in the near term. Indeed, some decline is a distinct possibility, and the rate of price appreciation should remain below trend for some time.

But as we move along, we start getting into deeper waters:

However, much of this negative impact should be offset by strengthening activity in other sectors of the U.S. economy, keeping GDP growth reasonably close to a sustainable trend-like performance.

Let me paraphrase: Housing is out of gas, and something else needs to step up to the plate and carry us for a while. It's easy to say, but hard to do, considering how much overall impact the housing boom has had on jobs, wealth, and growth.

He makes an interesting prediction:

It’s likely that the bulk of the downswing in home sales and housing production will occur this year, with market activity stabilizing around mid-2007 and moving back up toward trend by late 2008.

Again, let's paraphrase: The bubble has popped, like everyone said it would. But, the recovery will only take a year or two. Put a star by this one, I have a feeling we'll be adding it to the quote list later on.

More soon...