I’m not a frequent contributor, but I’m going to throw in my two cents on the semantics debate here. And yes, it is semantics, as most or all here are in agreement that this does not bode well for the housing market or the housing bulls. But semantics are important. Maybe when Lereah says that he thinks that the housing market has bottomed out, he means that sales volume has bottomed, and will rise in a declining price environment. I doubt it, but it’s possible.
“At risk” and “expected” are quite different. “At risk” is a term frequently used to describe Jr. High or High School aged children who are acting out and have had disciplinary issues. If my child were described as “at risk” and another parent, upon hearing that said, “we expect him to wind up in Juvie…” we would have big issues. If I lend a person money, I do so with the expectation that they will pay me back. However, there is the risk that I will get stiffed.
To be fair, sdcellar, PS didn’t say that 1.46mil will certainly default. She said that they are expected to. The truth, it would appear, lies somewhere in the middle.
Even as many homeowners will escape default, it does not mean that they are in the clear. At best, it will pinch their budget, and we will see a decline in consumer spending, mostly affecting retail and construction.
