Underwater Mortgages a Threat to Recovery; Expect No More Than 3% Growth Until Housing Recovers

Underwater Mortgages a Threat to Recovery; Expect No More Than 3% Growth Until Housing Recovers

from Mish's Global Economic Trend Analysis by noreply@blogger.com (Michael Shedlock)

In a Technical Note on GDP Bloomberg reports "First quarter Advance Real GDP Real GDP increased 1.8 percent (annual rate) in the first quarter of 2011, following an increase of 3.1 percent in the fourth quarter of 2010. The deceleration in real GDP in the first quarter reflected a sharp upturn in imports, a deceleration in consumer spending, a larger decrease in federal government spending, and decelerations in nonresidential fixed investment and in exports that were partly offset by a sharp upturn in inventory investment."

Underwater Mortgages a Threat to Recovery

Given the renewed housing bust what might one expect going forward?

A senior economist for Wells Fargo believes it is unreasonable to expect more than 3% growth going forward as long as housing remains deeply underwater.

Please consider Phoenix’s Underwater Mortgages Show Weakness in Housing Threatens Recovery