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As for housing prices, Mr. Rosenberg expects further declines of 10 to 15 percent over the next few years. He pointed to the roughly nine million residential housing units available for sale across the country, a very high vacancy rate when judged against a total housing stock of 130 million units.
If his forecast is accurate, the numbers of borrowers who owe more than their homes are worth will rise significantly. Mr. Rosenberg estimates that fully half of the mortgage-holding population in the country could be underwater by 2011.
For now, these borrowers are getting little to no help from lenders — no surprise — or from the government. Indeed, the Obama administration’s loan modification program has more or less allowed banks that own second mortgages on troubled borrowers’ homes to continue to press for full repayment of these obligations.
When it comes to writing down principal amounts on mortgages, the government has pressured those holding the first mortgages more than the institutions holding the seconds. Never mind that the second liens are worthless and should be written down to zero.
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I love the piece of mind I get from LEASING!
ReplyDeleteThe biggest problem with our housing market is incomes. Incomes have been under pressure from global competition as big business with government help has exported more and more jobs. Incomes have remained stagnant while the cost of home ownership has continued to increase. The cost of utilities, insurance, maintenance, and taxes continue to climb. While at the same time our incomes are being attacked from inflation in health insurance, education, gasoline, food and everything else from sales taxes to professional services. The middle class is caught in a vice and being crushed.
ReplyDelete12:46 don't forget all the illegals and workers from foreign countries who keep pouring in.
ReplyDelete1:44 I was in our local Walmart not to long ago and over the PA system came this rquest "If anyone can speak Mexican please come to the service center, we need your help" I walked by the service center to see what was going on and saw 5 or 6 young hispanic males inside. I'm certain that they were illegals.
ReplyDelete@12:46
ReplyDeleteI fully agree with your post.
I am sure that many of the McMansion buyers really thought that in the future their incomes would have risen to support what they bought. Hence, the buying of too much house on a stretched or forecast income. It seems once enough people got into this dangerous position financially, "someone" decided to pull the plug and wreck the plan. That is a transfer of wealth from the middle class to the "big folks" as who are so often referenced on this blog. I am no banking expert, but it seems that banks really did not care if these buyers could pay for the houses or not. Somewhere in here is a planned transfer of wealth.
You know how deep it is when people refer to their "local Walmart". Everything inside Walmart is from somewhere else, that is like our local illegals down at the local w....
ReplyDelete2:12, it's sad that people don't know it's not "speak Mexican," it's "speak Spanish."
ReplyDeleteI don't dislike Mexican people, hell, many of my relatives are Mexican, but these poor illegals need to go back home and take care of their country instead of bringing their poverty here.
There just aren't enough jobs.
And as for those workers coming on visas to work here, blame the gov.; I hear the gov. keeps pushing them on foreigners.
Are mortgage rates going up or down? I'm in the 5th year of a ten year arm at 5.125%. Shoulf I refinance or stay put and see what the rates are in 4 years?
ReplyDeleteCurt