A pair of housing reports from the New York Times. "Subprime loans, which tend to run roughly three percentage points or more above the rates available to the most creditworthy borrowers, have become the fastest-growing segment of the mortgage industry."

"As recently as 2000, there were just 719,000 such loans outstanding, about 2.4 percent of all mortgages, according to data from the Mortgage Bankers Association of America. By the end of June, though, subprime loans had reached 5.7 million, or 13.4 percent of the total. More than half are adjustable-rate mortgages, compared with just 18 percent for prime loans."

"Mortgage companies, banks and investors have been aggressively marketing and trading the loans because their higher interest rates make them far more profitable than prime loans, even after taking into account greater default rates."

"Roughly 350,000 subprime loans were seriously delinquent at the end of June, over six times the number at the end of 2000."

"Industry officials argue that on balance, subprime lending has been beneficial because it has given people who previously did not have access to credit the ability to buy homes. 'We all should be proud as an industry,' Michael W. Perry, CEO of IndyMac Bank told his peers at the Mortgage Bankers Association’s annual convention in Chicago recently. 'We have created an enormous amount of wealth for Americans.'"

"Seated next to him on the stage, Daniel H. Mudd, the CEO of Fannie Mae, acknowledged that the industry had helped expand homeownership, but suggested that it may have gotten carried away during the recent boom. 'Ultimately, putting people in a home they cannot stay in is not a business we should be in,' he said."

"Down in Naples, Fla. there was an auction of houses about a month ago. A few dozen houses went on the block in front of about 500 bidders."

"Based on the official housing statistics, you might have guessed that the sellers would have made out just fine, despite all the talk of a real estate slump. But that wasn’t what happened at the auction. In fact, if you were at the beach club that Saturday, you could have been excused for thinking that the real estate market was crashing."

"One three-bedroom ranch house with a pool sold for $671,000. In 2005, the same house sold for $809,000. Another house, just steps from Naples Bay, sold for $880,000 at the auction., compared with $1.35 million a year earlier. On average, the houses that changed hands at the auction had fallen about 25 percent in value since 2005, according to Thomas Lawler, a real estate consultant who analyzed the auction’s results."

"The truth is that the official numbers on house prices, the last refuge of soothing information about the real estate market on the coasts, are deeply misleading. The numbers overlook all those homes that have been languishing on the market for months, getting only offers that their owners have not been willing to accept."

"In reality, homes across much of Florida, California and the Northeast are worth a lot less than they were a year ago. Tom Doyle, a Naples real estate agent, estimated that a typical house there, sold in the normal way, would go for about 20 percent less than it did the previous fall."

"In the Boston area, prices have fallen about 10 to 15 percent since the middle of 2005, estimated Chobee Hoy, who owns a real estate brokerage firm in Brookline. Jerome J. Manning, who runs the Massachusetts-based auction company that conducted the Naples sale, told me he thought that values had dropped about 20 percent around Boston. The government, meanwhile, says the average price rose 1 percent from last summer to this summer."

"In September of last year, Ms. Hoy sold a one-bedroom condominium in Brookline for $395,000. She recently sold another apartment of the same size in the same building for $300,000. Since March, her firm has been listing a house in the Fisher Hill neighborhood of Brookline that cost $995,000 when it last sold, in the summer of 2004. Ms. Hoy expects it to sell this time for less than $900,000."

"The market in northern Virginia is similar: prices are down 10 to 15 percent, according Mr. Lawler, a former Fannie Mae executive who’s based there. In Portland, Me., the typical house has lost about 10 percent of its value in the last year and a half, said Bill Trask, the former head of the local Realtors’ board."

"Unfortunately, there are also a lot of families that took on huge mortgage debts based on the ephemeral peak values of their properties. In effect, they cashed in on the housing boom without cashing out. The withdrawals have been so big that the average household in Boston now has slightly less equity in its home than it did in 2000, according to an analysis by Moody’s that took inflation into account."

"Most worrisome, growing numbers of these families are falling behind on their mortgage payments, and they won’t be able to bail themselves out by refinancing or selling their homes. 'We’re now going to combine a high amount of debt with falling home values,' said economist Mark Zandi."