Will we see the start of another housing collapse before the end of 2010? That is what a number of top economists are beginning to fear. The truth is that there are some very troubling signs in the housing numbers. The massive tax credit that the U.S. government was offering to home buyers helped prop up the housing market for quite a while, but now that the tax credit has expired, many real estate professionals are bracing for the worst. The reality is that foreclosures continue to set all-time records, the mortgage industry is a complete mess and another massive wave of adjustable rate mortgages is scheduled to reset in 2011 and 2012. As the U.S. economy continues to falter, and as the nation starts to deal with the economic fallout from the Gulf of Mexico oil spill, many are now wondering how in the world Americans are going to be able to afford to purchase millions of these homes which are still massively overpriced. The American Dream is still way too expensive for the vast majority of Americans. So are there signs that housing prices in the U.S. could be on the verge of another major decline?
Well, yes.
The truth is that massive U.S. government intervention helped stabilize U.S. housing prices for a while, but the tax credit expired at the end of April. As home buyers rushed to finalize their purchases in March and April it made the housing numbers look promising for a couple of months, but now things are rapidly becoming unglued again. We'll get to the statistics in a moment.
The laws of economics can be delayed but not changed by politics. Until we break the cost of government we will not recover. The stock market will bottom when Cramer's show is cancelled. (i call it the idiot indicator) as long as there is an audience for his snake oil then the markets will not return to sanity. I make no estimate as of when, if ever that will happen.
ReplyDeleteHere in Missouri if you build a house you just create a giant never ending tax liability. Add to that insurance, maintenance, and inceasing energy and other utility bills with stealth taxes. People will be under increasing pressure to be able to own a home when you factor in decling and stagnant wages. We are being crushed in a vice and our standard of living is disappearing.
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