We’re including a speech by Daniel Mudd, the President and Chief Executive Officer of Fannie Mae. He does a good job of explaining everything that’s been going on with the housing market. We’ll include the main areas of his speech in five blogs so that you can read it.
“It is clear that housing is critical to the US economy. The building, selling, buying, lending, fixing, and furnishing of homes generates 9 million jobs, six percent of all employment, and more than 20 percent of our gross domestic product. Typically we spend 20 to 30 percent of our income on housing, and our homes represent 18 percent of our net worth.
It is also clear that the housing correction has been damaging to the economy. It’s taken $166 billion off the GDP, cut the jobs outlook by nearly half a million, knocked $1.2 trillion off of property values – and raised the specter of broader recession…
So when we examine the state of American business, and look at the year ahead, the housing correction is the relevant topic. Simply stated, the state of American business for 2008 depends on how quickly housing stops detracting from GDP.
I’d like to touch on how we got here, and then offer some thoughts about what we can do right now – and in the long term – to get through the correction to recovery.”