I keep on having conversations on why is not a good time to buy a house with many people.
People don't get it, with spiraling unemployment and baby boomers selling, there is no demand to drive prices up. The rates at a low of 4.69 average 30 year mortgage is not a reason to buy.
Below I plagiarized reasons why directly from Mish's blog.
Please see his article for full explanation.
Please see his article for full explanation.
- Boomers looking to downsize will add to housing supply.
- Foreclosures will continue to add to supply for several more years.
- Shadow housing inventory is massive.
- Global growth is slowing. This will affect exports and jobs.
- Bank balance sheets are tremendously weak. Don't expect lending to pick up or businesses to go on hiring sprees anytime soon.
- Unemployment is 10% and going to stay high for a decade.
- The economy is poised for a double-dip recession, assuming you believe the economy exited the last recession.
- Kids are graduating college hundreds of thousands of dollars in debt with no way to pay it back. They cannot afford houses and are delaying family formation.
- Nearly anyone who wants a house and can afford a house already has a house.
- Debt deflation will be in play for a decade.
- Attitudes towards housing have changed. A few years ago people thought of housing as an ATM as well as a retirement plan. Most people now realize a house is a place to live and a mortgage is a liability not an asset.
- Attitudes toward debt have changed. Kids have seen their parents argue and worry about mortgage payments, credit card payments, and jobs. They will not want to get in trouble like their parents did.
- 15 million homeowners are underwater on their mortgage according to Moody's Economy.com. Those 15 million homeowners are literally trapped in their home unable to sell and unable to move.
No comments:
Post a Comment