...In early 2007, Fitch Ratings expanded its public finance analysis by incorporating statistics indicating the condition of local resident ial housing markets. Given expectations for continued weakness in the U.S. residential mortgage and real estate markets, Fitch has formalized the addition of housing-related me trics into its public sector rating process and will continue to refine these data as market conditions warrant. These metrics expand on those introduced in two earlier Fitch reports on the impact of the housing market downturn on public finance ratings. Fitch believes that declining home prices intensified by the high and rising number of mortgage foreclosures will continue to negatively affect regional economies and th eir constituent state and local government credits. The recent, extraordinary disruption in the financial ma rkets and the economic fallout, which at its core stems from distresse d mortgage securities, is indicative of the housing market downturn s...
