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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!
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!
In all honesty, the crooks running our country have to do that to hide the real fact that our country has been gutted.
We used to be the biggest creditor nation of the world, and now we are the biggest debtor nation. We have no real production anymore, so all the crooks running the country can do to keep the phony economy running is bubbles.
We used to be the biggest creditor nation of the world, and now we are the biggest debtor nation. We have no real production anymore, so all the crooks running the country can do to keep the phony economy running is bubbles.
A+
But every CFR member-idiot that now runs America are an odd combination of too dumb to figure this out, and/or too tied-in to be willing to do anything.
There are serious dummies with various Masters degrees -- especially in business and education -- and because those are folks directing the business operations and education programs -- just look for more of this.
The "code" word for the condition is called "George Bush." Not an R or D thing -- as you noted Clinton signed it in, and every idiot on both sides now support it.
The folks just a layer below the idiots of the MBA level do not even understand who/what the CFR is why it is destroying America.
This is not an accident or some simple math mistake. There is intent. It just re-churns and pumps out more of the same crap.
The answer would be "yes" since, as others have pointed out, Bubble Economics is the only thing preventing the public from realizing the current economic Depression. So long as something is "always going up!" and the unemployment numbers are doctored, the nation can keep dreaming about "the Recovery" while the economy tailspins into oblivion.
Housing prices are still going up in various places, despite staggering real unemployment, and it is easy to get loans that require almost no money down. I'm not sure if interest-only loans are still available, but I'd be shocked if they didn't return before this next bubble pops. The cost for the Bubble needs to be transferred from the banks who created the mess to the already broken taxpayers, and that's the goal of the current pump-and-dump operation, IMHO.
HP planning to layoff as many as 35,000 workers... with such great employment news surely it must be a fabulous time to buy a house paying inflated prices with virtually no downpayment! Sometimes the idiocy of the general populace just astonishes me.
Most of these people who barely can scrape by the 3.5% downpayment don't have anywhere NEAR a sufficient financial cushion if they lose their job.
You see, people with solid financials would pay a lot more than 3.5% down and avoid all the upfront surcharges of an FHA loan...the very fact that people opt for these loans is a cue that they don't have very much money saved up relative to the purchase price...that in itself is a huge RED flag.
My neighbors are part of the people who will be causing this next underwater mortgage issue/taking advantage of easy money. He has one of the most outsourced jobs (computer support on a consult basis, managing entire teams in India via the phone), she works at max 10 hours per week at a gym. They are renting out their house (on their own, no rental agency) to a unmarried couple with horrendous credit, and are buying a house that is much more expensive, and will add 20-40 minutes to the commute each way. Oh, and they will be putting down about 7% on the new house.
But hey, if they can buy it, it means that they SHOULD, doesn't it? Grr....
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!
Did you read the article before posting your headline?
Almost every major housing index over the last year has been bad for housing, but any little somewhat "good" news the government and media run with. Housing isn't going up anytime soon. They just finalized the whole robo-signing issue, there are tons of people still in default in their homes or in the banks hands, and way too many houses and little jobs to fill any of these. Add to the fact all these baby-boomers are gonna want to get rid of their bigger homes and nobody is going to want them or pay the price for them.
We still have a good 3 years of home prices staying similar to the last few years, and I wouldn't put it past another 20 - 30% drop over that time.
They (government) tried manipulating housing back up with the $8,000 home buyer credit. I saw many people jump in just because they were getting $8,000 and home prices were less then they had been the last 3-5 years. Well, after they used the $8,000 (mostly as their down payment), many are already under water on their homes. Plus the loan modifications that were done, about 50% are still defaulting on their payments after taxpayers helped bail them out.
We need to get over high home prices and realize that was a bubble. It didn't work before, it won't work again. Buy a home when you can "really afford" it and believe you will be in an area for an extended period of time (8 years at least). Other than that, renting isn't that bad.
You do realize that if housing prices increase by 1.8% and inflation is 2.5% then housing prices haven't increased in real value, right? They have actually decreased in value. That's basic grade school finance.
More realistically, if housing prices increase 1% per year (OMG!!! ANOTHER HOUSING BUBBLE! BUY GOLD!!!!!1) and inflation is +3% per year, then the house is decreasing in value 2% per year. If that keeps up over five years, the house loses 10% of its value.
Last edited by mcredux; 05-24-2012 at 07:53 AM..
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