Add another victim to the subprime mortgage crisis: holiday shopping.
Higher monthly mortgage payments and tougher lending standards when borrowing against a home’s value will likely prevent many homeowners from buying holiday presents like they used to, the Wall Street Journal reports this morning.
Now, with mortgage delinquencies at record highs and mortgage-equity withdrawals well off the peak hit in the second half of 2006, the housing mess has begun to exact collateral damage on the larger consumer economy, beyond the furniture and home-improvement retailers that began to be squeezed a year ago. It is one of the main reasons that holiday sales are expected to be the weakest since the recession in the early part of the decade.[emphasis ours]