The Housing Picture Is Not Brightening

Discussion in 'Economy' started by AdvancingTime, Sep 3, 2018.

  1. AdvancingTime
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    AdvancingTime Senior Member

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    In America, the government, coupled with a slew of builder and Realtor associations control the housing narrative. Huge discrepancies exist in the cost of housing in the various markets across America and while price variations are not uncommon they should be seen as a reason for caution. The future of the housing market is a topic that has been subject to a great deal of debate and can be somewhat confusing.

    One of the sad accomplishments of current Fed policy is that low-interest rates often do not create all that much new demand but simply moves what does exist forward. To make the situation worse the FHA is busy issuing and guaranteeing risky mortgages written by thinly capitalized non-banks. This means America is preparing for a replay of the 2008 housing crisis. Our politically motivated government has been insuring subprime mortgages with down payments of as little as 3.5% while using weak underwriting standards.

    History has shown that such special financing simply encourages people to rush out and buy homes they cannot afford. This means foreclosures would soar if the housing market drops 20% which it could if Wall Street pulls back. For more on this subject see the post below which sheds light on some of the housing myths that have been generated and looks at where housing policies are taking us.

    Advancing Time: The Housing Picture Is Not Brightening - Part I
     

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