You Cannot Afford a $350,000 Home with a $75,000 Household Income!
You would think that before people make the largest financial decision in their lives, they would do a monthly budget first. Yet during this past decade budgets were hardly brought to the forefront and were pushed to the back of any financial decisions. The new definition of housing affordability should include the idea of maintaining a sustainable long-term budget. Of course many can afford a two year teaser rate but what happens when the payment jumps up? How secure is your employment? Do you have enough to save for retirement after you pay for your home each month? These are all factors that need to be considered to purchase a home.I’ve gotten a few e-mails about buying a home in California. Of course many people that have been sitting on the fence are now thinking seriously about purchasing a home in the state.
Foreclosure Cassandra: The Tangled Housing Web: Looking the Other way While Mortgage Fraud runs Rampant.
Today a reader sent in a link to an article that was published in the Fort Worth Weekly regarding predatory lending and how Americans are being put in the poor house. Does this story sound familiar? For all the rhetoric about people not seeing this crisis coming there has now been a release that the FBI knew the damage of mortgage fraud many years ago but was unable/short-staffed to do any significant thing about it. This article given the traffic to the site, is one of those Cassandra articles that no one wanted to read when it was published in August 10, of 2005. Three years ago at the height of the bubble the author Dan McGraw had the ability to put together a nice piece of journalism as opposed to massive salivating love most media outlets had for the housing market at the time.
Global Markets: World Stock Markets Feeling the Pain of the Credit and Housing Crisis.
There have been many theories floating around the financial press that the world markets are now independent and that having a global depression like times in the past was highly unlikely. For the most part, since the credit crisis took on a full head of steam in August of 2007 most world markets are falling in tandem with each other. The idea known as “decoupling” is largely untrue since each of the largest global markets based on their GDP are linked to one another. These countries trade, exchange, and interact with one another in their markets.
Housing Bottom: Futures Market Puts a Bottom at May 2010 Nationally. 17% More to go.
The idea of a housing bottom is intriguing. First, we need to put the entire housing rise to fame in perspective. Housing has never declined on a year over year basis since the Great Depression (that is until this current housing market). That is an astonishing accomplishment in itself and it is easy to understand why many wrestle with the idea that housing simply cannot go down for a long duration of time. It is also the case that this mental archetype which is so ingrained in the psyche of the American public is creating a desire for finality or a bottom to the current housing problems.