Proverbs 22:3 NLT

A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences.

-- (((Charles Finney, said the following: “If
there is a decay of conscience, the pulpit is responsible for it))) --


THOSE WHO WILL DO NOTHING NOW, WHEN IT COSTS THEM LITTLE - WILL DO EVEN LESS LATER, WHEN IT COST THEM EVEN MORE


Stan Deyo Earthquake / Volcanic Forecasts

Stan Deyo Earthquake / Volcanic Forecasts
Earthquake / Volcanic Forecasts

Preparing for what is coming to America - Prepare to Defend America

LIVE EARTHQUAKE MAP

My Blog List

Investment Watch

X22 Report is a daily show that will cover issues surrounding the economic collapse

Friday, July 11, 2014

The Rant has been openly skeptical of the home real estate market recovery. Today's review adds fuel to the skepticism.

The Rant has been openly skeptical of the home real estate market recovery. Today's review adds fuel to the skepticism. 
 
It still seems there are too many holes in the economy for the housing market to ever get back to the importance it held for the five decades from 1950 to 2000 before the government softened the lending standards and gave birth to the subprime contract.
 
More evidence of the basis for those who are wanting to believe in the recovery but can't find the proof in from the government's blizzard of data reports comes from an unlikely source--the daughter of a CEO who has spent his entire career pushing the housing market.
 
Sara Stevens, daughter of David Stevens of the Mortgage Bankers Association, knows all the positives. She has been indoctrinated since babyhood on the relative value of low interest rates and the fact home ownership builds wealth. She was also in a position to see the effects of the collapse of Lehman Brothers. Her one simple statement carries a punch, "The world has changed."
 
Her position correlates to that of other 24-34 year-olds in America today. The 'young generation' long-known and expected to be the risk takers the economic engine depends upon, is decidedly more old-fogey today. Risk is something to be shunned. They view the upside of status and wealth with a severely jaundiced eye than the generation that preceded them and bore the brunt of the housing meltdown of 2007.
 
Added to this is the weight of smothering student loans, an uncertain employment future, tightening credit and a sinking sensation the government once lauded is no longer able to control things. Those who might be able to buy are thus standing on the sidelines. First-time home buyers are shrinking in number and the economy is losing one of the cornerstones it needs.
 
May's figures for home sales are now in and first-time buyers shrank to 27% of all sales. The number is down for a third straight month, the percentage is down for a third straight month. How can this be shrugged off as another "headwind" by an inept Administration?
 
The 27% figure is just two-thirds of what has been the historical norm--about 40% of all home sales.
 
The elder Stevens observed, "We have a younger generation sitting on the front lines of the housing recession. Thus they are being more thoughtful about the decision and they are deferring that decision for a longer period of time."
 
Daughter Sara still isn't buying. "[Dad's] version of a family outing would be driving around neighborhoods where he'd point out houses, chattering about curb appeal and prices."
 
Cost isn't a factor the younger Stevens. She happens to be a legislative aide to U.S. Senator Michael Bennett (D-CO). Her and her fiancé recorded a combined income of over $107,000 last year. They owe about $25,000 in student loans (about half the average for a single student today) and the car they have is paid for.
 
But the kicker is the apartment they currently lease. The kids simply are not ready to settle down and give up the exotic nightlife only a short walk from their apartment. To make a blunt comparison, unlike their preceding generations, they are still babies in many ways, they haven't been forced to grow up and they haven't had to take any responsibility.
 
They don't want to change the status quo they are comfortable in.
 
This economic fundamental shift is not yet being accounted for. The Baby Boomers, while grumbling, mostly fell into line with where their parents' wants were at. This latest batch is off on a completely different tangent with a set of priorities and goals the number crunchers who try to force feed America with great data have not put into the equations.
 
There are good deals out there in the battered home market. But there will be vastly more. Values have recovered too fast without the underlying support of wage increases, once again putting the home market out of reach of many families.
 
Government wants a simple answer but there isn't one. Government meddling at the end of the Clinton Administration and GW's signing of the Frank Bill where lenders were unable to ask about "ability to repay", helped ignite the housing meltdown. The meltdown showed a fundamental flaw within the system where a mortgage was the norm.
 
Government economists are going to have to put that shifting fundamental into the works or the data will continue to mislead until government officials are surprised by another collapse. Being unprepared for the first meltdown was bad, there will be no quarter given if the coming wreck is not prepared for properly.
 
"I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man."--Thomas Jefferson
 
Quotes for today's Rant came from Bloomberg News, 7-11-14, "Daughter Not Buying Dad's Promoting US Homeownership." 

No comments: