"The housing correction poses the biggest risk to our economy," Paulson said the day he announced the Fannie and Freddie seizure. "Our economy and our markets will not recover until the bulk of this housing correction is behind us."
Some experts even argue that the steps being taken to rescue firms like AIG could make a recovery in housing and the broader economy more difficult, as financial firms and investors become more reluctant to lend money.
"We are certainly taking credit and squeezing it tighter and tighter," said Kevin Giddis, managing director of investment bank Morgan Keegan. "Housing needs buyers. Buyers need credit."
1 Year price differance Aug 2007-Aug 2008
ATL -8.5%
Boston -5.5%
CLT -1%
CHI -9.5%
Cleveland -7.3
Dallas -3.2
Denver -4.7
Det -16.3
Vegas -28.6%
L.A -23.3% (Southern Cal)
Miami -28.3%
Minn -13.8%
NY -7.3%
PHX -27.9%
PTL -5.8%
San Diego -24.2%
SF -23.7%
Seattle -7.1%
Tampa -20.1%
Washington DC area -15.7%
