Standard and Poor's this morning came out with their most recent report on the state of the housing market. The two biggest details of the report:
1. The total cost for the Government Sponsored Entities (GSE's) Fannie Mae and Freddie Mac to cleanse their balance sheet and continue to provide over 90% of the new mortgage loans in this country (as they do currently) would be $685 billion.
2. The total inventory on the market including the shadow property is currently at 40 months supply. A 3-6 month supply of homes represents a normal healthy market. This number is beyond staggering and only includes data through the first half of 2010. The housing market entered back into collapse mode around August so I would anticipate this number to be far higher today.
Fortunately, we have a Federal Reserve chairman fully prepared to buy every mortgage, bond, or stock in our country with a printing press as was announced yesterday. A $685 billion loss is far less troubling under that context.
