With this government, plunging home sales is no surprise
Yesterday, the National Association of Realtors reported a record month-over-month drop in existing home sales. It shouldn’t have surprised anyone.
Please read my article on the subject at the American Spectator web site:
| Print article | This entry was posted by Rossputin on 08/25/10 at 06:30:47 am . Follow any responses to this post through RSS 2.0. |
Yours truly
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08/25/10 @ 01:41:42 pm
No job growth, uncertainty about the economy in general is causing all sectors to be static or fallling at this time.
In a bid to stem taxpayer losses for bad loans guaranteed by federal housing agencies Fanny Mae and Freddy Mac, Senator Bob Corker (R-Tenn) proposed that borrowers be required to make a 5% down payment in order to qualify. His proposal was rejected 57-42 on a party-line vote because, as Senator Chris Dodd (D-Conn) explained, “passage of such a requirement would restrict home ownership to only those who can afford it.“
08/25/10 @ 01:46:10 pm
Airbus,
That story is a widely-distributed hoax.
RGK
08/25/10 @ 02:58:37 pm
This is a mess that will not be straigtened out within the next 1 to 5 years. It may well take a decade at least for al of this excess inventory to get wrung out of the system. For all of my optimism, there is no recovery in housing prices until the jobs come back. Those that have the cash and credit to get loans are waiting for the floor to keep falling and I don't blame them.
When all this started happening back at the end of 2007, I said the scariest thing that could happen is if everyone decides it isn't worth it to pay the mortgage before everything else. Well, look what has happened. You have credit card debt at its lowest in 8 years. People are walking away from underwater homes, and who could blame them. It's leaving the taxpayer holding the bag due to the size of Fannie and Freddie.
Cheap money and government activism lead to this mess. If the rules stayed in place with Fannie and Freddie keeping down payments to 20%, we wouldn't be in this mess. Instead, they asked for nothing down and then securtized the crappy loans.
08/25/10 @ 03:05:12 pm
Keith,
Not surprisingly, you're exactly right.
I might paraphrase your first paragraph like this: The only people who can get loans right now are the people who don't need them.
08/26/10 @ 12:36:08 pm
Exactly. Add to the fact that large institutions such as banks can borrow @ 0% and then use leverage to inflate investment earnings when all they need to do is by US debt, then you should be really pissed. Until interest rate rise and the banks have no inventive to add riskier loans to their porfolio. The monetary policy of this country is ass backwards. When IBM's rate is 1% for a 3year note, something is screwy.