Leave your feedback Share Copy URL https://www.pbs.org/newshour/show/housing-market-decline-impacts-first-time-buyers-lenders Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter Transcript America's shifting housing market is having a ripple effect on buyers of different income levels and causing some mortgage companies to close. A professor and a market journalist explain the problems with the current housing market. Read the Full Transcript Notice: Transcripts are machine and human generated and lightly edited for accuracy. They may contain errors. GWEN IFILL: We begin with the expanding housing crisis and the very real fallout it poses for Americans shopping for, selling, or investing in homes.Across the country, mortgage foreclosures are skyrocketing, home prices are dropping, "For Sale" signs are becoming part of the landscape, and construction is slowing down, as the nation's housing slump becomes a stubborn fact of life.Sales of existing homes in June dropped more than 11 percent from last year; sales of new homes plummeted 22 percent. As a result, there are now enough houses languishing on the market to satisfy sales demand for eight solid months. And as the mortgage market collapses, easy money in the form of low interest or no down payment loans is evaporating. GUY CECALA, Publisher, Insider Mortgage Finance: Literally anybody who could fog a mirror or had a driver's license could get a mortgage, and the pendulum is swinging pretty far the other way. GWEN IFILL: Lynda Nicolay said it took months for lenders to approve a loan for the person who wanted to buy her home in Phoenix. LYNDA NICOLAY: What I was hearing was that the banks weren't giving subprime lenders loans and they were double- and triple-checking. GWEN IFILL: Some of those mortgage lenders are now filing for bankruptcy. Yesterday, American Home Mortgage, one of the country's largest home lenders, became the latest casualty. Earlier this year, New Century Financial Corporation also filed for bankruptcy protection.Some presidential candidates have raised concerns about mortgage lending out on the campaign trail. Just today, Democratic Senator Hillary Clinton proposed providing federal aid to help homeowners avoid foreclosure.The housing decline has also rippled into related businesses, driving stock market volatility. But in deciding today to leave interest rates unchanged, the Federal Reserve opted not to step into that debate.For more now, we turn to Nicolas Retsinas, director of Harvard University's Joint Center for Housing Studies, and Mark Zandi, chief economist at Moody's Economy.com, an online research firm.Professor Retsinas, let's start with the Fed. They didn't step in today. Does that mean things are not as bad as they seem?NICOLAS RETSINAS, Joint Center for Housing Studies: No. First of all, in their statement, they indicated that they were aware of this issue. There is a lot of pressure on the Fed to act. There are other ways to act, however, other than changing the interest rate, and they are considering a number of rules that will affect lenders and affect this whole provision of credit.