Home › Forums › Housing › The sole goal of the freeze is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks a
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December 9, 2007 at 7:45 PM #112748December 9, 2007 at 7:51 PM #112560farbetParticipant
In Economics 101 students learn that markets are driven by demand and not supply. The Bush/Paulson plan addresses supply and assuming that the plan gets off the ground it will only address supply at the margin. This is not anyone’s fault. The pill that is required to fix the housing market will have to be swallowed in parts over time. The market is not willing to admit at this point how severe the problems are.
Back to demand. The demand for housing is broken up into parts:
1. subprime demand, once estimated to be about 20% of the market, basically no longer exists. They can’t get the financing.
2. The Alt. A group may also want to buy a home, but they can no longer obtain financing.
3. There are a few investors, but they have to have their own sources of financing.
4. That leaves only the prime borrower, defined as someone with the credit history, income, and down payment necessary to get a mortgage that can be sold to Fannie Mae and Freddie Mac (agency paper in the language of the “biz”).
These people fall into two groups: a) those that are will buy a home at or near current market prices. This is where most of the housing demand is coming from at this point. I call this group the “oblivious” group, because they are oblivious to the current market conditions and just want a home. People have a variety of legitimate reasons for buying a home, but in these times a “romantic” notion of home ownership based on thinking of the early and mid 20th century just may be obsolete.
The second group of prime buyers b) is very cognizant of the market conditions and are sitting on the sidelines waiting for the price of homes to fall more. My guess is, this second group of prime buyers is slowly growing larger at the expense of the “oblivious” group.
With all that said the housing market goes no where until demand increases. Demand will not increase until the price of existing homes decreases (forget new homes it is only 15% of the housing market) and the second group of buyers believes that we have hit the bottom. They will not believe that we have hit bottom until the housing inventory number starts to decline. If you will notice there are no comments about interest rates, they are not material.
Implodemeter 12/09/07December 9, 2007 at 7:51 PM #112677farbetParticipantIn Economics 101 students learn that markets are driven by demand and not supply. The Bush/Paulson plan addresses supply and assuming that the plan gets off the ground it will only address supply at the margin. This is not anyone’s fault. The pill that is required to fix the housing market will have to be swallowed in parts over time. The market is not willing to admit at this point how severe the problems are.
Back to demand. The demand for housing is broken up into parts:
1. subprime demand, once estimated to be about 20% of the market, basically no longer exists. They can’t get the financing.
2. The Alt. A group may also want to buy a home, but they can no longer obtain financing.
3. There are a few investors, but they have to have their own sources of financing.
4. That leaves only the prime borrower, defined as someone with the credit history, income, and down payment necessary to get a mortgage that can be sold to Fannie Mae and Freddie Mac (agency paper in the language of the “biz”).
These people fall into two groups: a) those that are will buy a home at or near current market prices. This is where most of the housing demand is coming from at this point. I call this group the “oblivious” group, because they are oblivious to the current market conditions and just want a home. People have a variety of legitimate reasons for buying a home, but in these times a “romantic” notion of home ownership based on thinking of the early and mid 20th century just may be obsolete.
The second group of prime buyers b) is very cognizant of the market conditions and are sitting on the sidelines waiting for the price of homes to fall more. My guess is, this second group of prime buyers is slowly growing larger at the expense of the “oblivious” group.
With all that said the housing market goes no where until demand increases. Demand will not increase until the price of existing homes decreases (forget new homes it is only 15% of the housing market) and the second group of buyers believes that we have hit the bottom. They will not believe that we have hit bottom until the housing inventory number starts to decline. If you will notice there are no comments about interest rates, they are not material.
Implodemeter 12/09/07December 9, 2007 at 7:51 PM #112715farbetParticipantIn Economics 101 students learn that markets are driven by demand and not supply. The Bush/Paulson plan addresses supply and assuming that the plan gets off the ground it will only address supply at the margin. This is not anyone’s fault. The pill that is required to fix the housing market will have to be swallowed in parts over time. The market is not willing to admit at this point how severe the problems are.
Back to demand. The demand for housing is broken up into parts:
1. subprime demand, once estimated to be about 20% of the market, basically no longer exists. They can’t get the financing.
2. The Alt. A group may also want to buy a home, but they can no longer obtain financing.
3. There are a few investors, but they have to have their own sources of financing.
4. That leaves only the prime borrower, defined as someone with the credit history, income, and down payment necessary to get a mortgage that can be sold to Fannie Mae and Freddie Mac (agency paper in the language of the “biz”).
These people fall into two groups: a) those that are will buy a home at or near current market prices. This is where most of the housing demand is coming from at this point. I call this group the “oblivious” group, because they are oblivious to the current market conditions and just want a home. People have a variety of legitimate reasons for buying a home, but in these times a “romantic” notion of home ownership based on thinking of the early and mid 20th century just may be obsolete.
The second group of prime buyers b) is very cognizant of the market conditions and are sitting on the sidelines waiting for the price of homes to fall more. My guess is, this second group of prime buyers is slowly growing larger at the expense of the “oblivious” group.
With all that said the housing market goes no where until demand increases. Demand will not increase until the price of existing homes decreases (forget new homes it is only 15% of the housing market) and the second group of buyers believes that we have hit the bottom. They will not believe that we have hit bottom until the housing inventory number starts to decline. If you will notice there are no comments about interest rates, they are not material.
Implodemeter 12/09/07December 9, 2007 at 7:51 PM #112724farbetParticipantIn Economics 101 students learn that markets are driven by demand and not supply. The Bush/Paulson plan addresses supply and assuming that the plan gets off the ground it will only address supply at the margin. This is not anyone’s fault. The pill that is required to fix the housing market will have to be swallowed in parts over time. The market is not willing to admit at this point how severe the problems are.
Back to demand. The demand for housing is broken up into parts:
1. subprime demand, once estimated to be about 20% of the market, basically no longer exists. They can’t get the financing.
2. The Alt. A group may also want to buy a home, but they can no longer obtain financing.
3. There are a few investors, but they have to have their own sources of financing.
4. That leaves only the prime borrower, defined as someone with the credit history, income, and down payment necessary to get a mortgage that can be sold to Fannie Mae and Freddie Mac (agency paper in the language of the “biz”).
These people fall into two groups: a) those that are will buy a home at or near current market prices. This is where most of the housing demand is coming from at this point. I call this group the “oblivious” group, because they are oblivious to the current market conditions and just want a home. People have a variety of legitimate reasons for buying a home, but in these times a “romantic” notion of home ownership based on thinking of the early and mid 20th century just may be obsolete.
The second group of prime buyers b) is very cognizant of the market conditions and are sitting on the sidelines waiting for the price of homes to fall more. My guess is, this second group of prime buyers is slowly growing larger at the expense of the “oblivious” group.
With all that said the housing market goes no where until demand increases. Demand will not increase until the price of existing homes decreases (forget new homes it is only 15% of the housing market) and the second group of buyers believes that we have hit the bottom. They will not believe that we have hit bottom until the housing inventory number starts to decline. If you will notice there are no comments about interest rates, they are not material.
Implodemeter 12/09/07December 9, 2007 at 7:51 PM #112758farbetParticipantIn Economics 101 students learn that markets are driven by demand and not supply. The Bush/Paulson plan addresses supply and assuming that the plan gets off the ground it will only address supply at the margin. This is not anyone’s fault. The pill that is required to fix the housing market will have to be swallowed in parts over time. The market is not willing to admit at this point how severe the problems are.
Back to demand. The demand for housing is broken up into parts:
1. subprime demand, once estimated to be about 20% of the market, basically no longer exists. They can’t get the financing.
2. The Alt. A group may also want to buy a home, but they can no longer obtain financing.
3. There are a few investors, but they have to have their own sources of financing.
4. That leaves only the prime borrower, defined as someone with the credit history, income, and down payment necessary to get a mortgage that can be sold to Fannie Mae and Freddie Mac (agency paper in the language of the “biz”).
These people fall into two groups: a) those that are will buy a home at or near current market prices. This is where most of the housing demand is coming from at this point. I call this group the “oblivious” group, because they are oblivious to the current market conditions and just want a home. People have a variety of legitimate reasons for buying a home, but in these times a “romantic” notion of home ownership based on thinking of the early and mid 20th century just may be obsolete.
The second group of prime buyers b) is very cognizant of the market conditions and are sitting on the sidelines waiting for the price of homes to fall more. My guess is, this second group of prime buyers is slowly growing larger at the expense of the “oblivious” group.
With all that said the housing market goes no where until demand increases. Demand will not increase until the price of existing homes decreases (forget new homes it is only 15% of the housing market) and the second group of buyers believes that we have hit the bottom. They will not believe that we have hit bottom until the housing inventory number starts to decline. If you will notice there are no comments about interest rates, they are not material.
Implodemeter 12/09/07December 9, 2007 at 7:58 PM #112571farbetParticipantOblivious Group or Cognizant Group??
I presume everyone here belongs to Group 2December 9, 2007 at 7:58 PM #112685farbetParticipantOblivious Group or Cognizant Group??
I presume everyone here belongs to Group 2December 9, 2007 at 7:58 PM #112725farbetParticipantOblivious Group or Cognizant Group??
I presume everyone here belongs to Group 2December 9, 2007 at 7:58 PM #112734farbetParticipantOblivious Group or Cognizant Group??
I presume everyone here belongs to Group 2December 9, 2007 at 7:58 PM #112768farbetParticipantOblivious Group or Cognizant Group??
I presume everyone here belongs to Group 2December 9, 2007 at 8:17 PM #1125864plexownerParticipantJim Sinclair (www.jsmineset.com) is highlighting the ‘Real Story is Fraud’ article tonight – I like Jim’s commentary and consider his advice on gold excellent – several people post on his site and provide excellent charts and commentary – look for Dan Norcini (charts and commentary – Dan is an active gold trader) and Monty Guild (global economic commentary)
Jim is also linking to these articles tonight:
Auto loan delinquency rises, another sign of stretched consumer
http://www.bloggingstocks.com/2007/12/06/auto-loan-delinquency-rises-another-sign-of-stretched-consumer/JPMorgan favors precious metals in 2008
http://sg.biz.yahoo.com/071207/3/4d825.htmlOil Min: Iran Has Halted Oil Transactions In Dollars
“… labeling the greenback an “unreliable” currency…”
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20071208%5cACQDJON200712080440DOWJONESDJONLINE000007.htmDecember 9, 2007 at 8:17 PM #1127014plexownerParticipantJim Sinclair (www.jsmineset.com) is highlighting the ‘Real Story is Fraud’ article tonight – I like Jim’s commentary and consider his advice on gold excellent – several people post on his site and provide excellent charts and commentary – look for Dan Norcini (charts and commentary – Dan is an active gold trader) and Monty Guild (global economic commentary)
Jim is also linking to these articles tonight:
Auto loan delinquency rises, another sign of stretched consumer
http://www.bloggingstocks.com/2007/12/06/auto-loan-delinquency-rises-another-sign-of-stretched-consumer/JPMorgan favors precious metals in 2008
http://sg.biz.yahoo.com/071207/3/4d825.htmlOil Min: Iran Has Halted Oil Transactions In Dollars
“… labeling the greenback an “unreliable” currency…”
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20071208%5cACQDJON200712080440DOWJONESDJONLINE000007.htmDecember 9, 2007 at 8:17 PM #1127404plexownerParticipantJim Sinclair (www.jsmineset.com) is highlighting the ‘Real Story is Fraud’ article tonight – I like Jim’s commentary and consider his advice on gold excellent – several people post on his site and provide excellent charts and commentary – look for Dan Norcini (charts and commentary – Dan is an active gold trader) and Monty Guild (global economic commentary)
Jim is also linking to these articles tonight:
Auto loan delinquency rises, another sign of stretched consumer
http://www.bloggingstocks.com/2007/12/06/auto-loan-delinquency-rises-another-sign-of-stretched-consumer/JPMorgan favors precious metals in 2008
http://sg.biz.yahoo.com/071207/3/4d825.htmlOil Min: Iran Has Halted Oil Transactions In Dollars
“… labeling the greenback an “unreliable” currency…”
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20071208%5cACQDJON200712080440DOWJONESDJONLINE000007.htmDecember 9, 2007 at 8:17 PM #1127494plexownerParticipantJim Sinclair (www.jsmineset.com) is highlighting the ‘Real Story is Fraud’ article tonight – I like Jim’s commentary and consider his advice on gold excellent – several people post on his site and provide excellent charts and commentary – look for Dan Norcini (charts and commentary – Dan is an active gold trader) and Monty Guild (global economic commentary)
Jim is also linking to these articles tonight:
Auto loan delinquency rises, another sign of stretched consumer
http://www.bloggingstocks.com/2007/12/06/auto-loan-delinquency-rises-another-sign-of-stretched-consumer/JPMorgan favors precious metals in 2008
http://sg.biz.yahoo.com/071207/3/4d825.htmlOil Min: Iran Has Halted Oil Transactions In Dollars
“… labeling the greenback an “unreliable” currency…”
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20071208%5cACQDJON200712080440DOWJONESDJONLINE000007.htm -
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