房屋泡沫远未结束 Banks happily loaned whatever amount borrowers wanted as long as the banks A return to traditional lending standards means a return to traditional For example, if interest rates are 5%, then $1000 per month ($12,000 per Recent lower Fed inter-bank lending rates do not directly affect mortgages Also note that unlike the last few years, most lenders now require a 20% It's worse than that. House prices do not even have to fall to cause big The government keeps prices unaffordable through programs that increase
http://patrick.net/housing/crash.html
rents are less than 3% of purchase price. Mortgage rates are 6.5%, so it costs
more than twice as much to borrow money to buy a house than it does to rent
the same kind of house. Worse, total owner costs including taxes, maintenance,
and insurance are about 9%, which is three times the cost of renting. Buying a
house is a very bad deal for the buyer.
Put in the numbers for your own area here.
keep falling or salaries must rise much faster. You probably noticed that your
salary is not rising much, and that inflation in food, energy, and medical
care has been much higher than the government reports. This leaves less money
available to pay for housing. A safe mortgage is a maximum of 3 times
the buyer's yearly income, but most mortgages are well beyond that. Anyone who
buys now will suffer losses immediately, and for the next several years at
least, as prices keep falling.
Gross Domestic
Product. The value of housing in the US depends a lot on the value of what
the US actually produces.
mass foreclosures, and senators are talking about
taking your money
to pay for your neighbor's McMansion, even though no one in the US has been
made homeless by foreclosure. In fact, forclosed owners end up far better
off: they go reap large savings every month, since it costs less than half as
much money in rent as they were paying to "own" the very same thing.
could then sell the loan, pushing the default risk onto Fannie Mae (taxpayers)
or onto buyers of mortgage-backed bonds. Now that it has become clear that a
trillion dollars in mortgage loans will not be repaid, Fannie Mae is under
pressure not to buy risky loans and investors do not want mortgage-backed
bonds. This means that the money available for mortgages is falling, and house
prices will keep falling, probably for 5 years or more. This is not just a
subprime problem. All mortgages will be harder to get.
prices, which are far below current prices.
increase in the amount of interest a buyer has to pay. House prices must drop
proportionately to compensate. The housing bust still has a very long way to
go.
year) pays for an interest-only loan of $240,000. If interest rates rise to
7%, then that same $1000 per month pays for an interest-only loan of only
$171,428.
rates, nor do extra Fannie or FHA guarantees. The 30-year fixed mortgage rate
actually went up after the Fed's rate cut, because rate cuts cause
higher inflation.
downpayment. That will eliminate many buyers from the market, driving down
prices.
people forget that losses get amplified as well. If a buyer puts 10% down and
the house goes down 10%, he has lost 100% of his money on paper. If he has to
sell due to job loss or an interest rate hike, he's bankrupt in the real
world.
losses. The cost of selling a house is 6%. On a $300,000 house, that's $18,000
lost even if prices just stay flat. So a 4% decline in housing prices
bankrupts all those with 10% equity or less.
new families, especially those with children. It is literally impossible for
them to buy at current prices, yet government leaders never talk about how
lower house prices are good for pretty much everyone, instead preferring
to sacrifice American families to make sure bankers have plenty of debt to
earn interest on. If you own a house and ever want to upgrade, you benefit
from falling prices because you'll save more on your next house than you'll
lose in selling your current house. Every "affordability" program drives
prices higher by pushing buyers deeper into debt. To really help Americans,
Fannie Mae and Freddie Mac should be completely eliminated, along with the
mortgage interest deduction. Canada has no mortgage-interest deduction at all,
and has a more affordable housing market because of that.
buyer debt, and then pretends to be interested in affordable housing. No one
in government except Ron Paul ever talks about the obvious solution: less debt
and lower house prices. The real result of every "affordability" program is to
keep you in debt for the rest of your life so that you have to keep working.
Lower house prices would liberate millions of people from decades of labor
each.
years were pure speculation, not houses to live in, and the speculators are
going into foreclosure in large numbers now. Even the National Association of
House Builders admits that "Investor-driven price appreciation looms over some
housing markets."
more than the price of the house he intends to buy. The appraiser goes along
with the inflated price, or he does not ever get called back to do another
appraisal. The speculator then pays the seller his asking price (much less
than the loan amount), and uses the extra money to make mortgage payments on
the unreasonably large mortgage until he can find a buyer to take the house
off his hands for more than he paid. Worked great during the boom. Now it
doesn't work at all, unless the speculator simply skips town with the extra
money.
1946-1964. One-third have zero retirement savings. The oldest are 62. The only
money they have is equity in a house, so they must sell.
faster than owners. Builders have huge excess inventory that they cannot sell,
and more houses are completed each day, making the housing slump worse.
are predicated on an impossible combination: the strong growth in income and
asset values of a strong economy, plus the ultra-low interest rates of a weak
economy. Either the economy's long-term prospects will get worse or rates will
rise. In either scenario, housing will weaken."
房屋泡沫远未结束
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