If mortgage lenders thought a stronger-than-expected spring homebuying season would help reverse their fortunes, they should think again, according to a new report issued by Morgan Stanley. The report says the housing market is weak in most key markets, including California and Florida. After polling 1,000 Realtors, Morgan is predicting a 19% decline in sales this homebuying season. Morgan analyst Ken Posner writes that his group is "defensively positioned, preferring to avoid or short stocks with mortgage-related credit exposure." He adds that, "Zeroing in on the issue of obtaining mortgages, our Realtors report that down payments are now the biggest stumbling block" to buying a home.
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