David Berson, the highly respected former Chief Economist at Fannie Mae, moved over to PMI to become its Chief Economist and Strategist. PMI just released their publication The Housing Mortgage Market Review, a timely publication given the swirl of information being released.

>The U.S. economy, housing activity, and financial markets all deteriorated over the past
month, increasing the likelihood that the economy is in recession. While we expect the
downturn to be relatively short and mild, the odds of a more serious slump are rising.

I struggled in Econ 101 class.

In other words, things are going to be weaker in the near term for a short period, but the odds are rising that it will remain worse for a longer period of time. Other interesting topics were that lower priced houses have been hit harder than higher priced houses.

The Fed easing will soften the downturn, but the financial market turmoil could unravel the benefits.

Credit spreads continue to widen.

This is also evidenced in the rise in mortgage rates despite the Fed’s aggressive actions to ease credit.

Fixed rates are dominating lending now.

The pace of foreclosures is rising.