The Mortgage Bankers Association says housing repossessions are at their highest rates ever, led by California and Florida. And loan payments at least thirty days late are at their highest since nineteen eighty-five.
Problems in the housing market represent the greatest risks to the economy.
Central bank chief Ben Bernanke says helping the economy is now more important than fighting inflation. He told the Senate Banking Committee last week that conditions are more difficult now than they were in two thousand one. That was the last year in which the American economy was in a recession.
Most economists define a recession as at least six months of economic shrinkage. The economy was still growing at last report, but very little: just six-tenths of one percent from October to December. That was down from almost five percent for the July-to-September period.
President Bush says the economy is in a slowdown and that he does not expect a recession. But investor Warren Buffett, just listed by Forbes magazine as the world's richest man, gave his opinion Monday. "By any common sense definition we are in a recession," he said on CNBC television.
Economic weakness has pulled down the value of the dollar. One euro is now worth about a dollar and a half, a record high. A weak dollar reduces the price of American exports. But it means higher prices for oil, which is traded in dollars.
This week, oil broke the all-time record of one hundred three dollars and seventy-six cents a barrel. That price, adjusted for inflation, was set in nineteen eighty.
The United States is the biggest buyer of oil. On Wednesday, OPEC refused the second American request this year to produce more oil. It said there is already plenty. The Organization of the Petroleum Exporting Countries said high prices were the result of "mismanagement" in the United States economy.
Falling prices in the housing market are feeding a credit crisis. Home prices fell ten percent nationally in two thousand seven. And experts say prices could fall another ten to fifteen percent this year.
The Bush administration has been urging lenders to negotiate new terms for loans held by people in danger of losing their homes.
Many people now owe more than their homes are worth. Some are simply walking away from their homes, even though that damages their credit records.
And that's the VOA Special English Economics Report, written by Mario Ritter. I'm Steve Ember.
ECON U-S- ECONOMY 030608 lyrics are property and copyright of their owners and are provided for educational purposes and personal use only.