Foreclosure 'Crisis' Will Hit New York, Los Angeles, Dallas Hardest in 2008: Report
A report released today by the U.S. Conference of Mayors casts a gloomy picture for 2008 and the nation's housing markets, saying that increasing foreclosures in key metropolitan areas across the United states will drive economic losses equaling $166 billion. The report projects that the foreclosure crisis will result in 524,000 fewer jobs being created next year and a potential loss of $6.6 billion in tax revenues in ten states. While the report stops short of forecasting a recession, 128 metro areas are predicted to be pushed into a "sluggish" economic growth of less than 2 percent in 2008, while growth will be cut by more than a third in 65 metro areas and by more than a quarter in 143 metro areas. The largest metro, New York, is projected to lose over $10 billion in 2008 economic output as a result of the mortgage crisis, followed by Los Angeles ($8.3 billion), Dallas ($4.0 billion), Washington ($4.0 billion), and Chicago ($3.9 billion). "Not that long ago economists said housing was the backbone of our economy," said USCM president Douglas Palmer, mayor of Trenton, NJ, at a meeting of mayors, mortgage industry representatives and community advocacy groups at the MGM Hotel in Detroit. "Today the foreclosure crisis has the potential to break the back of our economy, as well as the backs of millions of American families, if we don't do something soon. We must not let the economic numbers mask the face of this tragedy - the families who are struggling to pay their mortgages and stay in their homes," said Palmer. The foreclosure crisis alone will reduce home values by an additional $519 billion in 2008, the mayors' report estimated, bringing the total forecast of lost equity for the nation's homeowners to a staggering $1.2 trillion. For more information, visit http://www.usmayors.org.