[quote=briansd1]
To me, this statement below is very indicative of borrowers in over their heads. They need prices to remain high, in order to refinance (kick the can further down) or sell.
Despite talk by some that homeowners have plenty of equity and wherewithal, the facts are that the $8,000 rebates and the GSE increasing the limits following the 2008 crisis did spur homebuying.
Now that the incentives are gone, the market is taking the appropriate hit.
If a homebuyer really needs an $8,000 rebate to buy a house, then we have still have an affordability problem.
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You’ve hit the nail on the head, I believe. The government (either through GSEs or FHA) is something like 95-100% of the mortgage market now and the government is planning to make it harder to get a mortgage. Just look at all the predicted doom and gloom over the proposal to have the government raise effective down payments on FHA mortgages from a measly 3.5% to to a slightly less measly 7%.
Can we really be near a housing bottom when a proposal to raise down payments from 3.5% to 7% causes so much push back from the gangs of crack …. I mean home-dealers?
Previous housing booms coincided with good economies or job booms. I doubt that all of those fancy new jobs created by the boomlet in Cousin Burger franchises and the like are going to be enough to fuel a new housing boom.
The dollar may collapse, but if the plebeian hordes can only find work at Chotchke’s or Spatula City, housing isn’t going anywhere.
