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One of the reasons the corrupt Feds have been dumping BILLIONS into Fan & Fred is to allow more and more lending for homes........they want the housing market to bubble up again.......that sweet glow of another sick bubble......what the US Of Amerit*** lives for.
Rising housing prices destroyed the economy and yet they look to this? That's like watching blood gush from a wound and rejoicing that some blood still remains.
I see that I have more courage than another Conservative. I used to read the National Review regularly.
Now I see Buckley knew. Imagine if he had had the guts to inform me then in my 20s when I was an avid reader of his? How much damage you have done, Bill to leave the fight to another generation and not to bring up the rightful access to the usufruct, where the rising value of real estate is its antithesis. Money flowing in to the ground rents of real estate cannot expand the economy.It will shrink it and add to the welfare state.
W.F.B.: It's mostly because I'm beaten down by my right-wing theorists and intellectual friends. They always find something wrong with the Single-Tax idea. What I'm talking about Mr. Lamb is Henry George who said there is infinite capacity to increase capital and to increase labor, but none to increase land, and since wealth is a function of how they play against each other, land should be thought of as common property.The effect of this would be that if you have a parking lot and the Empire State Building next to it, the tax on the parking lot should be the same as the tax on the Empire State Building, because you shouldn't encourage land speculation.
The premise that there is another housing bubble forming is erroneous on several points.
First the majority of home sales presently are cash buyers purchasing homes for investment.
Second the inflation push is rapidly closing the gap between home prices and real values.
Housing is quickly becoming both a safe haven for investment money from both an investment return perspective, and a safe haven for inflation.
That is the reason banks are in no hurry to sell off the shadow inventory they are sitting on.
Now add to that the pool of buyers who have been excluded from the present housing market by the loss of a previous home who in a few years will once again be able to purchase and you have a situation of shadow future demand.
Real inflation is currently running at 8% a year, and will be driven higher in the future by the ever increasing money printing by the Federal Reserve and the deficit spending of the US government.
Lastly you need to consider demographics. With an increasing percentage of the US population being of Hispanic descent, and the cultural norms of Hispanics to have larger families, there will be an ever increasing demand for housing going forward.
When you combine all of these arguments, it is difficult to see how we could be heading into another housing bubble at this period.
Real inflation is currently running at 8% a year, and will be driven higher in the future by the ever increasing money printing by the Federal Reserve and the deficit spending of the US government.
Your argument does not make any sense whatsoever - I believe the term I want to use is "nonsense".
Inflation in wages is not happening, infact wages are flat or declining. When combined with inflation in other areas it actually puts MORE pressure on home prices not less because loans are qualified by income not by the cost of other goods and services. When cost of other fundamentals such as food goes up people have less money to save for a downpayment, less money to pay towards the costs of home ownership and also less inclined to make such a commitment.
If real inflation is 8% as you claim are people getting 8%+ raises? Give me a break!
If investors are buying homes it means there is just market speculation, it does not mean housing has stabilized. It is foolish to make such an assumption. Investors DO lose money, even so called smart investors...heard of JP Morgan's $9 billion loss last month due to an investment error? Following the news lately at all? I guess not!
Your argument does not make any sense whatsoever - I believe the term I want to use is "nonsense".
Inflation in wages is not happening, infact wages are flat or declining. When combined with inflation in other areas it actually puts MORE pressure on home prices not less because loans are qualified by income not by the cost of other goods and services. When cost of other fundamentals such as food goes up people have less money to save for a downpayment, less money to pay towards the costs of home ownership and also less inclined to make such a commitment.
If real inflation is 8% as you claim are people getting 8%+ raises? Give me a break!
If investors are buying homes it means there is just market speculation, it does not mean housing has stabilized. It is foolish to make such an assumption. Investors DO lose money, even so called smart investors...heard of JP Morgan's $9 billion loss last month due to an investment error? Following the news lately at all? I guess not!
Go back and read what I said. I never indicated there was inflation in wages, you misunderstood what I wrote. Inflation in its simplest definition is devaluation of currency which is what is happening.
Also you need to recognize that the investors coming into the market now are a different breed than the so called investors that were invested in 2006. The investors who are purchasing in today’s market are for the most part people who got out prior to the 2007 crash and have been sitting on their profits waiting for the price/rent ratios to once again be reasonable.
Between prices falling 50% in many areas, and inflation driving down the purchasing power of cash, real estate is a very reasonable alternative to equities or any type of bond investment. Yes investors lose money, it is part of the equation, in order for one person to win someone else needs to loose. You can fear losing, but you cannot really avoid it. You have to do something, and even so called safe investments involve losses. Timing is always the key to making money, doing the right thing at the wrong time is what determines financial loss.
Perhaps housing should no longer be used as an important index of economic well-being. It wasn't, prior to the end of WWII. It became one only because of the GI Bill.
With the news that home prices are rising it is timely that this article comes out to shed a bit of light on what exactly is happening in the housing market.
The FHA, which has been dubbed the next subprime, lends huge sums of money to people with questionable credit histories (as low as 500!) with super low downpayments. After the disaster that we have been through in the last few years this sounds just like deja vú!
History is bound to repeat itself and nobody learns from past mistakes!
And it is repeating itself, as expected FHA default rates are rising.
Quote:
NEW YORK (CNNMoney) -- The mortgage market appears to finally be stabilizing -- as long asyou ignore loans backed by the Federal Housing Administration.
Increasingly, FHA-insured loans are falling into foreclosure or serious delinquency, moving in the opposite direction ofloans guaranteed by Fannie Mae and Freddie Mac or those held by banks,which are all showing signs of improvement.
Andtaxpayers could ultimately be on the hook for FHA's growing number of troubled mortgages. The agency's finances are already on shaky ground, and additional losses from loans going sour could prompt the need for a federal bailout, experts said.
"We can't escape this one," said Joseph Gyourko, a real estate professor at the University of Pennsylvania's Wharton School. "This is an arm of the U.S. government."
The share of government-guaranteed loans, a majority of which are backed by FHA, that were 90 days or more delinquent soared nearly 27% during the year ending March 31.Foreclosuresjumped nearly 17%, according to a report published recently by federal regulators.
At the same time, bank loans saw a dramatic improvement, with delinquencies shrinking by 39% and foreclosures declining by nearly 10%. Fannie and Freddie's portfolio also improved as delinquencies dropped by nearly 15% and foreclosures slid by more than 6%,the quarterly report issued by the Office of the Comptroller of the Currency said.
FHA has also had a tougher time successfully modifying loans. More than 48% of government-guaranteed mortgages re-defaulted 12 months after modification, compared to 36.2% of loans overall, the report said.
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