Housing Market Continues Downward Spiral

The housing market continues its downward spiral as President Bush touts the economy amid more jobless claims . His administration is so out of touch with the real world it is frightening.

NEW YORK (CNNMoney.com) -- The outlook for the housing market looks bleaker than ever. Foreclosures are skyrocketing. Home prices continue to fall. And forecasts for a recovery keep getting pushed back.

Meanwhile the collapse of the subprime lending market has spread to the financial markets, sparking fears that tighter credit will have a broader impact on consumers and the economy.

The U.S. government has downplayed the risk of the subprime meltdown spreading. Treasury Secretary Henry Paulson has said the effects are largely contained, and the economy is still strong. William Poole, the president of the St. Louis Federal Reserve branch is also reserved.

"Unless the pressure becomes much more severe," he said on July 20, "the problems would not impact consumer spending or credit quality more generally."