Mortgage Woes Spill Over Into Auto Market

The escalating crisis in the U.S. subprime (bad credit mortgage) market has gone beyond prospective home buyers and their ability to qualify for home loans.

In addition to a reeling housing market, the mortgage woes have impacted U.S. auto sales this month, General Motors Corp. Vice Chairman Bob Lutz said Monday.

Lutz, who was in Louisville, Kentucky, to attend an automotive industry conference, said he did not know how GM’s sales had performed in April to date, but said he expected the whole sector would feel the effect of the stress on the housing market.

GM and other automakers will report April U.S. sales results on May 1.

“The market as a whole has been a little weakish. That has come as a result of the housing market problems and the mortgage industry meltdown,” Lutz said in an interview with Reuters.

“A lot of people are finding themselves to be a position of reduced home loan affordability and that has had an impact, not just on us, but across the industry.”

SOURCE: MSNBC