Housing Slump Could Pinch Consumer Spending...

Housing slump could pinch consumer spending, from MSNBC.com, reports that some analysts are voicing concerns that the end of the housing boom could also spell the end of the extended consumer shopping spree because homeowners are not pulling out cash from their homes due to a flattening out of the housing market. "We have seen consumers use their houses at ATM machines," said John Marcell Jr., a mortgage broker in Upland, CA. "Whenever they get their credit card debt up high, they go ahead and refinance and bail themselves out. That's well and good as long as you have a rising market. But when that rising market no longer rises, you have some real issues." Homeowners have tapped more than $250 billion in equity from their homes this year according to the latest forecast from Freddie Mac. The same forecast sees cash-out refinancing falling sharply next year-- to $152 billion-- and to $108 billion by 2008. Many economist see continued job growth and relatively mild inflation as signs that the housing slowdown will not have much significant, harmful economic impact.

http://www.msnbc.msn.com/id/15016057/