The housing bubble is getting ready to implode: The scariest chart in real estate shows an impending correction because you can’t afford to buy a home today.
“Definition of economic bubble: A market phenomenon characterized by surges in asset prices to levels significantly above the fundamental value of that asset.” We are definitely in another housing bubble. First, most Americans can’t afford to buy a home without utilizing artificially low interest rates and even then they are stretching their budgets like spandex. […]
Get used to an America where owning a home is not part of the dream: You cannot afford a home on that income!
Well congratulations America. Signs of another housing bubble are as clear as day. Loans with nothing down are back in the market. Incomes are stagnant so creative financing is necessary to buy more expensive homes. And homes are more expensive. The current home price data shows that across the country we have now surpassed the […]
You are too broke to own a home in America! The typical American household making $50,000 a year cannot afford to purchase the typical $200,000 median priced home without straining their budget.
People continue to scratch their heads as to why regular home buyers in America are unable to enter the housing market. Prices are up but this is mostly because of investor money that is obsessed with chasing yield in a low yield environment orchestrated by the Federal Reserve. The reason home sales figures continue to […]
Refinancing debt into prosperity – most mortgage activity for refinances with applications up 97 percent from last year and car sales are down by over 50 percent from 2001.
Shuffling papers around on your desk does not mean you are being productive but might give the appearance of activity. Refinancing debt in countries in an insolvent position may feel good for the moment, but ultimately the position is unsustainable. You buy yourself a window of opportunity. With the Federal Reserve pushing mortgage rates to […]
The desert mirage of easy housing profits – Phoenix Arizona home prices on track for four consecutive years of year-over-year home price declines. 55 percent fall from peak and nominal home prices back to 2000 levels. What happens when investors dominate the market?
The foreclosure epidemic in states like Arizona and Nevada is breathtaking and incredibly disheartening. Prices have cratered much more quickly than the methodical rise up in the last decade. Home prices in Phoenix now sit precariously where they did in 2000 without adjusting for inflation. These desert communities largely built on a dream, fast construction, […]
The wonder years – over 70 percent of GDP comes from personal consumption. For the past decade home equity and credit from other sources fueled growth because of falling household incomes. What happens when credit contracts and home equity evaporates?
In a debt based economy a credit crisis is similar to an uncontrollable virus spreading from house to house. The slow infection hibernated for decades until it went into a pandemic. It is troubling to see how the middle class is slowly being dismantled. However there is one silver lining of the home price correction. […]
The coming failure of Operation Twist – The Federal Reserve resurrects a program from the 1960s named after the Twist Dance. Appropriate timing for a Dancing with the Stars nation.
The Federal Reserve has literally run out of ideas. Operation Twist, a throwback to the 1961 action taken by the Fed named after the Twist Dance fad at the time, is now back in 2011. This time the Fed plans to purchase $400 billion of bonds with 6 to 30 year maturities while selling bonds […]