Housing market problems

Housing market problems

housing market, wolverton, cagle, Dec. 23, 2013CalWatchDog.com stories repeatedly have warned that the optimism over California being “back,” as Gov. Jerry Brown insists, may be overblown. That doesn’t mean a recession is approaching, only that policymakers ought to be careful.

Now this from AP:

The number of Americans applying for mortgages has fallen 63 percent since a May peak, reflecting a cooling housing market and higher borrowing rates.

The Mortgage Bankers Association says applications fell a seasonally adjusted 6.3 percent last week from a week earlier. Applications are now at a 13-year low.

The drop-off follows a 1 percentage point increase in mortgage rates from historic lows last spring. The average for a 30-year mortgage is 4.47 percent, according to mortgage buyer Freddie Mac.

That means the mortgage application rate is even lower than it was during the 2007-09 housing crash.

7 comments

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  1. LetitCollapse
    LetitCollapse 26 December, 2013, 13:14

    The economy could not survive a rise in interest rates, particularly when much of the growth in the economy is predicated on a housing bubble – that is forming once again. In California only 36% of households can afford to buy a home. So we’re replaying the same old failed strategy again. 1% rise in mortgage rates = 10% drop in home prices. lol. Plus, with rising interest rates the stock and bond markets would crash along with the housing market. So QE will continue indefinitely until it drives consumer prices to the moon. Don’t believe the CPI. It’s lying to you. Believe what it costs YOU to live.

    Education costs: up (ask any college kid)
    Healthcare costs: up (read today’s news about ObamaCare)
    Energy costs: up (when’s the last time you saw $3/gal gas?)
    Housing/Rent costs: up ($1800 for a lousy 1 bdr apt in a decent area of LA)
    Entertainment costs: up ($92 for a ticket to Disneyland)
    Travel costs: up (check out all the add-on fees with the airlines)

    Wages have been flat or even decreasing in some industries. And the oligarchs want to saturate us with even more indigent foreign workers! lol.

    What is keeping interest rates artificially supressed? Quantitative easing. The infusion of more worthless fiat dollars into the economy that pushes the cost of living higher and erodes your buying power. And Yellen loves quantitative easing. She’ll continue right where Ben left off.

    Net outcome? Supressed wages. Higher poverty rates. More crime. More urban blight. Decreasing quality of life.

    Reply this comment
    • Dyspeptic
      Dyspeptic 26 December, 2013, 15:13

      Don’t forget that artificially low interest rates keep the Federal Government solvent. The Federal Reserve is by far the biggest buyer of Federal debt now. Without that funny money subsidy the current regime could not hope to sell anything more than a fraction of it’s current debt.

      Reply this comment
      • LetitCollapse
        LetitCollapse 28 December, 2013, 11:46

        And there are always 2 sides to a ledger. For every person who benefits from low interest rates, another person loses.

        Seniors who are approaching retirement or who have retired have traditionally relied on fixed income investments to supplement their earnings. A ‘safe harbor’, so to speak. With 1% (or less) returns on those investments, now many are forced into riskier investments just to make ends meet. What happens if the bottom falls out again? They’re done.

        Plus, as I noted before, the buyback of US treasuries by the Fed forces consumer prices upward. Anybody who lives in the real world can see that prices are going up much faster than being reported by the government or the media. Education, housing, healthcare, energy, etc…. costs are rising quickly while wages remain stagnant. And those costs consume the biggest portions of consumer incomes. So the consumer is paying the price on the back end for all this QE activity. And when prices rise and wages don’t – it creates big problems for the peasants on Main Street while the Too Big To Fail’s and Too Big To Jail’s get richer and richer.

        Reply this comment
      • Rex the Wonder Dog!
        Rex the Wonder Dog! 28 December, 2013, 12:43

        Don’t forget that artificially low interest rates keep the Federal Government solvent.

        Dys, our US government is $18 TRILLION in debt, financing 38% of our operating costs with borrowing. Every single year.

        CA is $500 billion in debt from pensions ALONE. Add in healthcare debt and it could be over $1 trillion.

        You still think we are solvent? I don’t.

        Reply this comment
        • LetitCollapse
          LetitCollapse 28 December, 2013, 20:50

          $18T doesn’t really describe the total public debt since a large portion of the debt is not even figured into the calculation. If you include the debt on social security, medicare, medicaid, unemployment benefits, unfunded pension liabilities, guaranteed student loans, etc… which are all OFF THE BOOKS, the total federal debt is closer to $100T. That’s just the public debt. Private debt is a whole other story.

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  2. billyBS
    billyBS 26 December, 2013, 14:19

    Would’nt be too surprised if gov t pulled some shell game to keep housing going..(history repeats itself?)by encouraging the intellectually challenged to buy houses, take out more debt and buy wide screens(just in time for next NFL season), cars, boats…under the guise of fairness. Would be fun to watch the aftermath from some remote place(Space station?) as the starving masses seek new food sources in the state capital…Porterhouse Perez for example.

    Reply this comment
  3. Queeg
    Queeg 30 December, 2013, 00:40

    Stop worry. Utopia is in reach…..

    Collapso, Dys, Donkey and Poodle your in good hands……if you want to keep your debt you can keep your debt!

    Reply this comment

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