Foreclosures and subprime woes hurt home builders

(EMAILWIRE.COM, April 12, 2007 ) SACRAMENTO – Foreclosures and subprime mortgage defaults are factors that are hurting the business activities of some of America’s biggest home builders. The largest of these companies, D.R. Horton, Inc. said Tuesday that orders for new homes fell 37 percent in the first quarter of 2007.Chairman Donald Horton lamented that the spring home buying season, traditionally strong, has not gotten off to a good start. D.R. Horton reports that as many as 40 percent of people who buy its homes are first-time homebuyers, and these people are having a harder time qualifying for loans than in the past.Other major builders, such as Lennar Corp. and Ryland Group Inc. also indicated that they were not seeing a great start to the spring sales season. They blame unsold inventory and large numbers of existing homes on the market.One factor that helped create this situation is the collapse of many lenders in the so-called subprime mortgage market. These companies specialized in lending money to buy houses to people with poor credit or to people who did not want to prove how much money they were making. Many of these, especially New Century Financial Corp., are experiencing severe financial distress.This poor overall situation suggests that the drop in the housing market in the United States has not reached its lowest point yet. “People across the country keep hoping that we’re going to turn the corner and see [home] prices start to go up, but we may be in for a longer and deeper correction than many had anticipated,” commented foreclosure expert Patrick McGilvray, J.D., CFP®, president of http://www.TheHomeBuyingCenter.comThis Sacramento-based company matches distressed homeowners with individual investors and prospective home buyers , and he reports that calls from across the nation keep pouring in as people struggle to avoid foreclosure and deal with increased mortgage payments.California, which saw incredible price appreciation between 2000 and 2005 leads the nation in a drop in orders for D.R. Horton Inc. The company reported a 59 percent drop in orders for new homes in the state.Contact:Patrick McGilvray, J.D.Tel: 916-920-3278http://www.thehomebuyingcenter.com###This press release was issued through GroupWeb EmailWire.com. For more information on press release distribution, go to http://www.emailwire.com.

Patrick McGilvray, J.D.
Patrick McGilvray, J.D.

patrick@thehomebuyingcenter.com