[mEDITate-OR:
not watch all those new home buyers...!!!
who will disappear, as if by magic, next month.
To say that mortgage applications are in flux...
is a gross understatement.
In the first article:
CR, using MBA, points out to U.S. that we are seeing another "home buyer credit" bump.
that will NOT continue.
What we are also seeing is that RE home interest rates are level at just above to just below 5%
What we are NOT seeing is a continuation in REFI's.
That may be due to the continued job losses, or to people finding out they are too underwater to do a REFI, or to the tightening of credit standards that prevent REFI's.
What that DOES mean is that there is NO "fix" applicable to those people to solve their problem.
What is also means is that their will be a LOT more "walk-aways" and "strategic defaults".
And, a LOT more foreclosures, and short sales.
The second article shows U.S.
that their is a very clear, direct economic connection...
between having a job and being able to live in a home.
What was done..., deliberately..., by WBush...
was to shift wealth FROM the middle class TO the rich...
THAT created this mess.
IF we do not make the shift BACK...
this graph is telling U.S.
that we will never, EVER see the home values that we have now lost.
That America will be gone..., forever.
Point:
after WW2 we, as a nation, incentivized ourselves to
GET a college education...
find and buy our families a home of our own.
buy a new car, every year..., and drive them everywhere...
The role of that "incentive" program transformed U.S., and the world.
What WE have now done to ourselves is substantially reduce the "incentives" available to U.S. to make our lives and those of our children better.
China has not, is not, and is not very damn likely to make the same mistake.
If you do not understand much of what is happening, now...
you MUST understand that point.
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This graph shows the MBA Purchase Index and four week moving average since 1990.
This is the highest level for the purchase index since last October.
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Below is a comparison of real house prices and the unemployment rate...
The two previous national declines in real house prices are evident on the graph (early '80s and early '90s). The dashed green lines are drawn at the peak of the unemployment rate following the peak in house prices.
The unemployment rate peak in 2009 is likely, but not certain
The two previous national declines in real house prices are evident on the graph (early '80s and early '90s). The dashed green lines are drawn at the peak of the unemployment rate following the peak in house prices.
The unemployment rate peak in 2009 is likely, but not certain
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