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No official statistics I'm aware of, but even if it's 10%, that's 1/3 of the down payment...gone. For an FHA "homeowner", it's typically under 3%, so they're now upside down and screwed if they have to move.
The fact is you should not buy a home unless you plan to be there a minimum of five years.
Now close your eyes and imagine what will happen to home prices if interest rates went up to oh....6-7% for a 30-year fixed.
Everything else being equal that would drop home prices 20% or so across the nation.
That's the other shoe waiting to drop on the housing market. It will happen eventually.
Quote:
Originally Posted by summers73
EXACTLY what I'm thinking. Anyone who is putting down big money on a house in a market that's not already majorly depressed is in for a hurtin' (unless of course they plan to die where they bought)
Quote:
Originally Posted by Mathguy
What would be the perfect storm if this is you....a spike in interest rates....you buy after the market drops 25%. Interest rates swing back down a year or so later and you refinance.
You guys are jumping the gun.
What I'm seeing is a flat market through the end of the decade, and just when things start to pick up, you get hit with Real Inflation and they'll have to raise the Prime Rate to about 13%-15% to squeeze out all that money they dumped.
6%-7% for a 30-year fixed sounds about right, but you know there'll be some sorry sods out there that get a variable rate and they'll get hammered when the rates start jumping.
What what happens...
Mircea
Quote:
Originally Posted by whogo
The fact is the faster the housing market hits bottom the sooner economic activity in real estate starts picking up. Government should not be impeding the fall.
Well, it's in government's nature to muck everything up and stick their nose in places it doesn't belong. For every year the government interferes, they do nothing but prolong the problems for 12-24 months.
Quote:
Originally Posted by whogo
The fact is you should not buy a home unless you plan to be there a minimum of five years.
Agreed, but there's always that "Circumstances Beyond Your Control" thing.
In many cases I would agree. However, near my parents in the Saint Auggy area there are SFHs selling for $50K in relatively good shape. OK, so it goes to 40 or 30K...but I can't see it going too much lower than that.
Seriously? I can't even get a freakin cabin out here in the sticks for less than 100k.
Seriously? I can't even get a freakin cabin out here in the sticks for less than 100k.
An example close by. I recommend the area, so long as you have 100% cash and no inclination to get a job. Basically, if you're retired and cash rich you could do well moving there.
A program on NPR this morning said the banks will not loan money for purchase of houses. They are also holding foreclosures off of the market awaiting price increases.
Looks like the banks with all the foreclosures are stalling the recovery.
A program on NPR this morning said the banks will not loan money for purchase of houses. They are also holding foreclosures off of the market awaiting price increases.
Looks like the banks with all the foreclosures are stalling the recovery.
Doesn't make sense to risk capital at a paltry 3-4% for 30 years, unless you are absolutely positively sure the person will pay you back. It makes much more sense to get a guaranteed 0.1-1% on millions of dollars getting a 0% rate from the Fed and sitting on bonds.
I can see why some people want the big banks to go out of business, but what about your local credit union? You want to see them go under for making loans out at ridiculously low rates to risky borrowers?
Good luck getting your house re-assessed to reflect real market value.
Around here they've been very fair about this. However, other parts of the country I wouldn't hold my breath.
Especially true in urban enclaves with mono-party rule, very strong entrenched public sector interests etc. They cannot cut spending so they have to keep up the tax base.
I thought mr obama had fixed that crap already? I guess he's just been too busy fixing the planet and all.
He hasn't found a way yet to GIVE every underwater homeowner their house.....for free.
Quote:
Originally Posted by crone
A program on NPR this morning said the banks will not loan money for purchase of houses. They are also holding foreclosures off of the market awaiting price increases.
Looks like the banks with all the foreclosures are stalling the recovery.
You can thank DODD-FRANK for that, the wonderful law shoved through congress on a party line vote, signed by obama.
Obama has to be careful. He needs Goldman Sachs' support but he wants to appease the stupid overleveraged "homeowners" who bought at the peak.
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