US housing oversupply to continue

09/25/07 - UBS

NEW YORK, September 25 (newratings.com) - Analysts at UBS say that unlike previous housing sector downturns, the current one was created by excess supply.

In a research note published this morning, the analysts mention that the oversupply condition was exacerbated by the adoption of new, more stringent lending standards. UBS expects the rising foreclosures to increase the supply of houses in the market, while the lack of finance for the housing market to reduce demand by 10%-15%. The market is unlikely to witness stabilization before 2009, the analysts add.