"(H)omeownership is...a drag on the economy, since it funnels resources into unproductive overconsumption...but Americans think now is a good time to buy a house, largely because they think it’s always a good time to buy a house."The survey and Salmon's analysis offers a pretty bleak picture of taking on large debt for a depreciating asset. For somebody "on the fence" about buying, this could be the confirmation to continue renting.
READ The National Housing Survery and the Real Estate Bear Market
LOOK AT 10 Key Charts to See Before You Buy A Home
And Mortgage Broker Michael David White (who did the 10 Key Charts, above) offers his projection of housing price declines with his widely circulating Property Price Index, indicating the US still has 22%, nationwide, to fall before bubble values finish deflating: (click for larger image in new window)
Then White makes a wild call for a return to sanity:
The bubble began in 1990. For the last 20 years buyers bought a scam. The terms of the scam kept getting worse and worse until 2006. How many homeowners in the United States of Mortgage Fraud are living in a make-believe world of income-not-required lending and name-your-price appraisers? When do we return to a 120-year price trend (see below) which we ran away from 20 years ago? When will trillions of unaffordable mortgage debt be written off? When do we stop sending fools in to buy both their first home and their first financial failure?See the original post at New Observations.
We can break the credit bubble, but we must take chemotherapy. Burn up fake debts. Slash false prices. Fire sale failed banks. Convert equity to wall paper. Convert debt to equity. Rematch the price of housing to income. Make it cheap to own or rent.
We must re-balance the economy. Massacre mortgage debt. Tear up the other credit-bubble paper. It’s time to get to work. It’s time to get the real economy humming again. We can do that very easily. Crush, kill, and destroy faux credit-bubble debt and we are ready to fly upward.
Reader Responses to April Listings
Mortgage Rates and Inventory Up
9 Reasons Home Prices Will Continue Dropping in Cville/Alb