HOUSING BUBBLE?

NewsTarget.com printable article Monday, August 29, 2005

The "housing bubble" is due to burstConsumers are selling their homes in hopes of taking advantage of the "housing bubble" before it bursts.

Overview:
My wife and I have lived in the same home for 25 years, raised both of our children there, and owned the property outright without any loans or mortgage.
I don't say that for sympathy, but to illustrate that we played by the rules, worked hard, paid our taxes, and took advantage of the American dream of home ownership.
The current housing bubble is "larger than the global stock market bubble in the late 1990s (an increase over five years of 80% of GDP) or America's stock market bubble in the late 1920s (55% of GDP).
The banks have lowered the standards for home loans to such an extent that the traditional loan of 20% down and a fixed interest rate is virtually a thing of the past.
Consider this: In 2004 "one-fourth of all home-buyers -- including 42% of first-time buyers -- made no down payment."
Sorry, but if a buyer can't come up with at least $5,000 dollars for a down payment, he shouldn't qualify for a home loan.
Equally troubling is the fact that "nearly one third of all new mortgages this year call for interest-only payments (in California, it's almost half)" (NY Times) This tells us that a large number of new buyers can barely make their payments, but are gambling that their property value will go up enough to justify their investment.
Remember, "class-warrior" Alan Greenspan lowered the prime rate to a ridiculously low 1% in 2002 to keep the economy humming along while $300 billion was sluiced into Bush's "preemptive" war in Iraq and while the tax cuts were siphoning the last borrowed farthing out of the public coffers.
The Bush tax cuts transferred an average of $400 billion dollars per year into the pockets of America's plutocrats.
Source: http://www.dissidentvoice.org/July05/Whitney0727.htm
NewsTarget.com printable articleMonday, August 29, 2005
The "housing bubble" is due to burstConsumers are selling their homes in hopes of taking advantage of the "housing bubble" before it bursts.
Overview:
My wife and I have lived in the same home for 25 years, raised both of our children there, and owned the property outright without any loans or mortgage.
I don't say that for sympathy, but to illustrate that we played by the rules, worked hard, paid our taxes, and took advantage of the American dream of home ownership.
The current housing bubble is "larger than the global stock market bubble in the late 1990s (an increase over five years of 80% of GDP) or America's stock market bubble in the late 1920s (55% of GDP).
The banks have lowered the standards for home loans to such an extent that the traditional loan of 20% down and a fixed interest rate is virtually a thing of the past.
Consider this: In 2004 "one-fourth of all home-buyers -- including 42% of first-time buyers -- made no down payment."
Sorry, but if a buyer can't come up with at least $5,000 dollars for a down payment, he shouldn't qualify for a home loan.
Equally troubling is the fact that "nearly one third of all new mortgages this year call for interest-only payments (in California, it's almost half)" (NY Times) This tells us that a large number of new buyers can barely make their payments, but are gambling that their property value will go up enough to justify their investment.
Remember, "class-warrior" Alan Greenspan lowered the prime rate to a ridiculously low 1% in 2002 to keep the economy humming along while $300 billion was sluiced into Bush's "preemptive" war in Iraq and while the tax cuts were siphoning the last borrowed farthing out of the public coffers.
The Bush tax cuts transferred an average of $400 billion dollars per year into the pockets of America's plutocrats.
Source: http://www.dissidentvoice.org/July05/Whitney0727.htm
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