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Why Housing Is Dead: First-Time Buyers Collapse To 27-Year Lows
The Millennials (one of the biggest generations in US history) are just not getting with the status quo program. As we detailed previously, with lower credit scores, less disposable income, and a soaring number of people living with their parents; so it should be no surprise that The National Association of Realtors (NAR) today admitted that first-time homebuyers plunged to the lowest level in 27 years. The blame - of course - rather than low/no-growth fiscal policies, student debt servitude, and inequality-driving cheap-funding monetary policy, is price competition from 'investors' and too "stringent credit standards," perfectly mirroring FHFA's Mel Watt's Einsteinian insanity desire to dramatically ease lending standards and slash minimum down-payments (as we noted previously). Perhaps NAR accidentally stumbles on the biggest reason no one is buying in their profiling: the typical first-time buyer was 31-years-old, while the typical repeat buyer was 53 - smack in the middle of the Millennial collapse.
"First time home buyers are not coming back. Not even close." - CNBC's Olick #StickerShock pic.twitter.com/qyevEVn1FT
— Rudolf E. Havenstein (@RudyHavenstein) November 3, 2014
Here is the size of the Millennial generation in context:
With less disposable income, and thus fewer assets, today's youth is finding it ever more difficult to build up a solid credit history...
... and another logical outcome: fewer can afford to buy homes and start familiies, instead chosing to live in their parents' basement...
Read more about The Millennials here...
* * *
Which is exactly what is happening (as NAR reports,)
Despite an improving job market and low interest rates, the share of first-time buyers fell to its lowest point in nearly three decades and is preventing a healthier housing market from reaching its full potential, according to an annual survey released today by the National Association of Realtors®.
The long-term average in this survey, dating back to 1981, shows that four out of 10 purchases are from first-time home buyers. In this year’s survey, the share of first-time buyers* dropped 5 percentage points from a year ago to 33 percent, representing the lowest share since 1987 (30 percent).
Who is to blame?...
Lawrence Yun, NAR chief economist, says there are many obstacles young adults are enduring on their path to homeownership. “Rising rents and repaying student loan debt makes saving for a downpayment more difficult, especially for young adults who’ve experienced limited job prospects and flat wage growth since entering the workforce,” he said.
“Adding more bumps in the road, is that those finally in a position to buy have had to overcome low inventory levels in their price range, competition from investors, tight credit conditions and high mortgage insurance premiums.”
Yun adds, “Stronger job growth should eventually support higher wages, but nearly half (47 percent) of first-time buyers in this year’s survey (43 percent in 2013) said the mortgage application and approval process was much more or somewhat more difficult than expected. Less stringent credit standards and mortgage insurance premiums commensurate with current buyer risk profiles are needed to boost first-time buyer participation, especially with interest rates likely rising in upcoming years.”
* * *
Well, Bloomberg reports that:
A U.S. housing regulator plans new steps to encourage banks to lend to buyers with less than-perfect credit scores, according to two people with direct knowledge of the matter.
Watt will also discuss an effort that would allow borrowers to put down as little as 3 percent of the purchase price on loans backed by Fannie Mae and Freddie Mac, the people said.
Fannie Mae and Freddie Mac (FMCC), which have been under U.S. conservatorship since 2008, buy mortgages and package them into bonds on which they guarantee payments of principal and interest. Watt’s announcement is part of an effort to encourage banks to ease credit and follows a series of steps he first described in May.
It’s for the good of the people right? He’s a “liberal” so he’s always working for the little guy, right? Wrong.
The best characterization of Mr. Watt I’ve seen comes from realestate.com, here it is:
While some observers consider Watt’s appointment a significant lurch to the left compared to DeMarco, (he was among those named by the Democratic Socialists of America as a member of their caucus in 2009), Watt himself has raised a tremendous amount of money from banking and real estate-related corporations and trade associations. One report from the Sunlight Foundation found that for 2009, Watt had received some 45 percent of his total campaign funds from donors in the finance and real estate sector.
This is what all these phony “liberals” do. They pretend to be champions of the poor so that they can fool their clueless constituents and thus serve the oligarchy that much more effectively. This housing plan isn’t about helping families afford homes, it’s about creating artificial demand for overpriced homes so that stuck private equity and hedge fund mangers (who can no longer make it rain in the buy-to-rent trade) have some peasants to sell to ahead of the next crash.
Rule Number 1 of Oligarch Club: Always make sure you sell to the muppets before the music stops. Here we go again.
* * *
Certainly does not look like "The Recovery..." it was penned to be...

The long-term...
The transmission channel is officially broken... so don't ask for more Fed action!
* * *
Leaving Rudy Havenstein to sum it all up perfectly!!
The Fed has essentially created a housing market suited only for the wealthy, flippers, and people laundering money.
— Rudolf E. Havenstein (@RudyHavenstein) November 3, 2014
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Who needs a house when you can shack up with mom and dad? As the boomers leave their homes and enter retirement villas, the two-storey inventory glut will hit with a bang. This is just the beginning. Housing is done.
Never should have been twisted into an "investment" in the first place by the money lenders and MSM constantly pushing the "flip this house" TV illusion.
off the subject: anyone use bullion direct? what dealer do you use?
thank you in advance
House? Land? We need Americans to fill up all of the new Multi-Family Debt-Service Camps.
http://www.forbes.com/sites/billconerly/2014/05/19/multi-family-real-est...
The out of work "millenials" must not know that unemployment is only 6%.
japan merica style. huff and puff dat colony of flim flam piece of shit called clusterfuck housing...
"lurch to the left"
Lurch to the left then lurch to the right...
You do the hokey pokey
and you turn yourself around
that's what it's all about.
Left-Right arguments are bullshit.
Yeah, but can the kid’s afford the Radon remediation for mom and dad’s basement?
'Improving job markets '. Wtf!
Time to print houses for the FSA
Maybe the Fed should replace some of the Heidelbergs with these things..
http://www.youtube.com/watch?v=SObzNdyRTBs
From the article:
The bold emphasis is mine. To me that is the big huge elephant in the room. Houses are WAY WAY WAY overpriced. Yeah credit is stringent, student loans are due, credit cards are due, 0-care insurance is due, food went up from a decade ago, but all of that wouldn't be such a big deal if houses were priced at 1990s levels.
A mid-century out-of-style, out-of-date, box that was worth $70,000 in the late 1990s, shouldn't be worth $199,000 today (despite being a decade and a half older mind you) just because a flipper put in a new sink faucet and a paint job.
Despite being conned seven ways to Sunday, at least Millenials realize at least THAT is a scam, and that is why living at mom's house that she bought in 1984 and paid off is better deal for them. Even renting an apartment is better, because at least the landlord has a full-time maintenance crew, whereas the upkeep for the said mid-century box will cost lots of time and money that they don't have.
If interest rates go up, mortgage companies might as well just declare Chapter 11 and throw in the towel. If June 2013's increase to 5% caused massive layoffs at mortgage companies because their phones went dead silent for a whole 8 hour shift, it will be much, much worse.
Until housing has a major correction, these charts will look worse and worse by the month.
good perspective there, 9thDoctor,
particularly when one factors in the "millennials" aren't needing huge old boxes to live in, as many haven't bought into the "nuclear family" meme, and are instead either building some type of "tiny house" or "mobile living" arrangement for chasing "jobs".
and then there is the downsizing "boomer" with huge old houses invested in and empty rooms to heat/maintain.
the future of housing is shifting with demographics/wage availability - most of the younger folks I know aren't interested in being tied to a debt-box in the same fashion as past generations were. most of them want flexibility to explore whatever options interest them, and various types of "community" models are being created all around us - healthy!
9th doctor is correct; my old house is still up over 300% when salaries in that area have not risen more then 10% over the last 10 years. In fact, many companies and small businesses there (including my former company there) actually CUT salaries 10% and eliminated many benefits.
Oh yeah, property taxes there have skyrocketed b/c of new or expanded schools and the tax base on these overpriced boxes.
It blows my mind how many otherwise smart people don't understand the basic math realities that will crush housing in the long run.
You are wrong, doctor. Around my town, millenials with jobs are paying $600k for 50 year old crap boxes on tiny plots, where you can hear your neighbor's toilet flush.
They've learned nothing. Most have nothing to spend beyond the must have apple product. Those that do have income waste it just like every other clueless TV brainwashed generation.
Healthy alright. The healthy avoidance of debt penury that created all those McMansions.
No.
They still have to pay off the hefty loans
from taking important courses at elite universities:
http://www.thecollegefix.com/post/19952/
So, FHFA want to lower the down payment on an FHA mortgage from 3.5% to 3.0% and save the day? I dont see that happening...
high density killing fields
Return to Pullman days where you worked for him and he gave you a house to live in.......for most of your wages... What a deal
BB days. Before Banksters.
Everybody is broke and they shagged most of the sheep last time around so nobody wants to play. The banks are leveraged out the ass and are holding a lot of property off books so they won't show their true losses but it can't last forever. I expect the next round of FED burning money will be them buying up land in some kind of REIT type scam. This won't end well.
Maybe we should force Fannie to loan to people that can't afford it....I heard that was very successful previously!
As a Gen-X my advice to the millenials is don't get sucked in. The banks through either stupidity or corruption crashed housing values for my generation. Everything many of us worked for disappeared with a few months. Want a nightmare? An upside down mortgage with jobs in the area disappearing.
In the end, no one owns anything anyway. We all wind up in the grave and the banks take control of it again.
There not getting sucked in.
Each new generation is harder to con than the one previously.
I was a sucker and believed in the American dream. Now my house sits filled with the unemployed homeless and rodents.
I was such a sucker, served in the military, went to college, worked hard. It is all BS.
Now they intend to sucker the next gen. I can't believe they are pulling this scam again. Makes me sick.
Gold Bitchez...I pick up pennies
I see these same types of buildings now all over the place where I live. I believe there are about 5 or more of these operations within a 5 mile radius and most are about 250-500 units. This is the new reality under the Obama economy. Single family homes are now considered a multi-unit building and I'd bet anything they will if not now be all federally subsidized living at some point.
yes, freee, food, flothing, and housing... FSA Free shit Army
The army of the damned....
How many repo's are still on the books?
How many more available?
How many yet to come?
They're worried about rehabbing the patient and they haven't even stopped the bleeding, yet.
" This is the new reality under the Obama economy"
Yes, cause things would be sooooo different under Romney. You really should read http://www.zerohedge.com/news/2014-11-02/what-will-change-ifwhen-republicans-take-senate, or you can continue to believe in the Donkey/Elephant show.
Obama is the president mind you who has nearly doubled the debt in six years and we still see the labor participation rate plummeting. It's his record that is going to hinder this economy in the US for decades. Additionally, there are no easy answers to get the US back on track that don't entail a lot of pain for everyone.
Right. The turning point came in August 2011. That's when he threatened to starve Granny if CONgress didn't vote for his spending increases. 2012, huge TEA party rout. The growth of spending has slowed since.
Now is the best time to sink 300% of your income into a money pit.
National Association of Retarded Realtors
There's only two families that got a 'zero-down' mortgage while everyone else we know paid at least 20% and many 50% down or 100% (esp the Chinese and Iranian neighbors...all cashola!).
Funny how those 'zero-down' families are the only two families that defaulted on their mortgage and are in the process of being foreclosed upon.
The solution according to some of these misguided individuals is more zero-down loans.
Many Yutes don't seem to understand owning a house or any RE is a massively expensive, illiquid investment that sucks up quite a bit of your time and money -- property taxes, insurance, maintenance, and on and on are super expensive.
100% down and no payments. My accountant is still pissed I didn't take payments and all the wonderful 'deductions' that comes along. Of course I'm one of those evil people who believe in cash and carry.
My brother is an insurance investigator. He told me about a case last week on a home just purchased at auction by Invitation Homes. I said "That's a nice name. Which big hedge fund owns them?". He didnt know so I looked it up. Yup. Blackstone Group...Peterson and Schwarzmans outfit.
BTW, they are being sued for mold issues on some of their homes that they have "fixed up" to rent out. What a racket the rental market has become now.
Not to fear, lending standards will continue to fall, otherwise price depreciation will hit. TPTB need home prices to remain elevated, and the FRB will be helping. QE5/Backdoor NINJA loans will be coming in 2015.
More power to them. IMHO, three-generation families are much stronger than two-generation families. More grandparental wisdom and love available to the kids, better access to extended family; healthier for the grandparents; may make it financially possible for one of the parents to stay home. Many advantages. I'm think of those Mongolian families living in tiny yurts, and how much healthier and happier (and freer) they seem than American families living in 3,000 square foot McMansions.
Maybe...As long as the parents have a good work ethic. Sometimes it is the parents are lazy and the grandparents have to do all the parenting.
Sadly, true.
Millenials voted for hope and change. I'd say they got the change part at least. Hope? Not so much.
I have several work associates that, unbelievably, have 40+ year old "children" at home. If they do work, it is at fast food or other low paying jobs. One is 400+ lbs working at Game Stop so he can try out new games. His mom told me that's all he does plus look at porn all day. I don't know why they tolerate this. I once asked why they don't insist he straighten out his life. The answer was " he's shy". WTF? How this man will afford the house when his parents die is beyond me. They pay close to 8k a year just in property tax. Maybe he figures he'll die of a heart attack before the inheritance runs out.
My own daughter at 24 has a good income, lives independently and could easily qualify for a mortgage. She has no interest in saddling herself to a home and wants the freedom to move quickly if her career changes in these difficult economic times. We certainly can't fault her reasoning.
Maybe these are two extreme examples but the debt heavy Millennials don't have much wiggle room.
Miffed
we need to start building smaller houses.. Levittown style again..
No money in it.
I'm just waiting for the first serious call that "owning a home is a basic human right". Getting closer, but not quite there yet. Then the government will build those "starter" houses for you. I doubt they'll call it Levittown, though. It'll be called FEMA Camp 2487, though the locals will refer to it as 'Obamaville'.
Micro housing with canvas walls and plenty of chances to commune with Giaia, especially during those 4am trips to the latrine during a blizzard.....
http://alumni.colorado.edu/wp-content/uploads/2009/10/Voices-Shantytown-cape-town.jpg
Nope. There's tons of great houses that are empty or have one little old lady living there.
Let interest rates rise, and wait, for the dead cat bounce;)
After 17 months on the market, we just got an offer on my 94 year-old Mother-in-law's modest 2 bedroom home. We moved her to an independent living community once the household chores became too much. This lady continued to garden and maintain her yard until she was 92, and is still in good physical shape.
The house is immaculate, the yard is spacious, well tended, and has a nice work/storage building. It is on a circular cul-de-sac, no other houses behind it or on the left, so plenty of privacy. There is an elementary school not more than 200 yeards away, and kids can walk there without even crosing a road. It is also near a hospital and many physicians offices. Lot's of ahopping nearby. It is perfect for a young family, single parent, etc.....a mellinial
We thought $75K would turn it pretty quickly, but no interest. Also no interest at lower prices, until the last drop to $55K. We really just want to get rid of it now, and are hopeful that nothing goes wrong before the December closing. There were 2 offers to rent-to-own, but we were not interested in being landlords. Both couples had cash flow for the rent, but one could not get a down payment for a loan, and the other could not qualify for a loan due to high student loan debt.
There is always seller carry back - you hold the mortgage UNLESS you need the entire sale proceeds.
Charge a fair interest rate, say 2 or 3% annual, but make it a variable rate tied to inflation or the 1 year treasury. Take as large of a down payment as they can afford, but without busting their savings.
Everybody WINS: you get a productive asset with a very good return, buyers get a nice starter home and hopefully maintain it, neighbors get a floor on their home values.
NoVa
We are 100 miles from there, and have no interest in being tied to the box. My one forray into being a landlord was an educational experience I don't care to repeat.....experience - what you get when you don't get what you thought you were going to get.
There is always seller carry back - you hold the mortgage UNLESS you need the entire sale proceeds.
Charge a fair interest rate, say 2 or 3% annual, but make it a variable rate tied to inflation or the 1 year treasury. Take as large of a down payment as they can afford, but without busting their savings.
Everybody WINS: you get a productive asset with a very good return, buyers get a nice starter home and hopefully maintain it, neighbors get a floor on their home values.
NoVa
the "future" plans don't really include whole "houses" for the peoples.
think battery-hens. stacked 'n' controlled.
just look at other nation-farms globally, including the newer "ghost cities" built in China. little individual "units" where the piped in utilities can be turned on & off to suit the "owners".
just look at the "new housing units" being built in UK cities, or San Francisco, New York. tiny, utilitarian, built to an Agenda. long term.
I still remember the first time I saw Baltimore.
I thought row houses were the saddest thing I had ever seen.
But I was very young then.
I went thru there about 25 years ago with my family in a motorhome looking for gas.
I was in the HEART of the jungle.
I found a gas station, after driving blocks of bitch black row houses (scary).
When I got out of the coach, it was like an EF Hutton commercial.
Everyone (all black) and I mean EVERYONE as far as I could see (all 4 corners/across the street) stopped in their tracks and stared at me.
I don't think some of them had ever seen a white person.
You sure you weren't in Glasgow ?
Yeahp. Me and a few friends got lost in Baltimore after an O's game around 1990 at about midnight. Little kids running around in the street at midnight, people hustling around like it was 12 noon instead of 12 midnight. We ended up paying some nice gentleman $10 to point us in the nearest direction towards 95S. Some surreal shit down that way. Some next level 3rd world shit in fact.
Sad, but a step up back then.
The problem is a price problem, not a construction problem, and a huge portion of housebuilding costs are fixed.
This is a Fed problem, plain and simple. We've been in an economic repression since 1999-2001 and these are the biggest victims, followed by boomers and their savings accounts.
We need to start un-building the Fed, not building smaller houses.
Boomers have savings accounts? Huh. Here I was thinking that the boomer generation is the domestic excuse for the whole QE/manipulated markets thing. Thought their "savings" were tied up in 401Ks and such that rely on high stock prices to show growth in their "wealth".
Deflation = Progress
This is true. Where we live it is the building fees etc that are the killer. We tried to buy a lot 15 years ago, drill a well and build a modest home. It was going to be around 500K. We damn near flipped. So, we bought a fixer upper nearby for 390K that was fully fenced with outbuildings and mature trees. We finally understood why most homes in our area were cookie cutter row houses or McMansions built by construction companies not individuals. The cost is prohibitive.
Miffed
Yeah sure, try living in an original Levitt with 5 brothers...... If you did you might be rethinking that statement!
Smurf villages
Duh, what is the average wage of those Millennials?
(assuming they are employed of course)
i dont believe the price of the house or the wage levels are the core problem for this demographic.
The fact that a very high percentage have substantial college loans and are more importantly now on 1099 vs W-2 creates risk for lender and the borrower - if you dont have stability it is very difficult to make a big commitment. This is offset to some degree with two people working as apposed to 40 years ago when it was the exception.
Bingo. We have a winner. One solution to the housing crisis is the elmination of student loans via new educational models like oplerno.com.
Excellent satire! Bravo!
$200k homes on a $10 an hour 29 hour a week salary isn't a problem? I can tell your joking, because that was really funny. No sarc tag needed on that one!
Just ASK anybody under 35 why they can't get a house, and they will straight up tell you. The jobs out there don't pay squat, and a $1,000+ a month mortgage, neverminding the down payment, is beyond their reach.
$200k homes? Where?? SFH in questionable areas of NoVa full of illegals and an hour away from your job are $350k. Anything in the nicer areas of NoVa with good schools is 550 large for a 40 year old fixer upper. This area is the suck.
The 1099 VS Salary dilemma is real. I make a large take home via 1099 for the last year and half but it is via 1099 so it doesn't help much to the ability to buy a house. We have afforded and paid for our house based on one salary so it has worked out for the better anyway.
But it doesn't change the fact that 1099 means you need to wait a few years to develop a history VS salary is almost immediate...
Over priced shit., no real jobs. This housing fraud is getting old.
But each house produces the most precious substance in the knowable universe. The American Dream. How can it be that courageous convictions alone cannot drag the dream into existence? (Apologies to Neil Peart)
people who can do math are not buying becasue houses are way to high. The only buyers are the "how much per month" types and they are already long
And the ones looking for capital gains over the decade and never factor in the maintenance costs etc.
paint
re-seal driveway
re-pave driveway ruined by root damage
caulk where carport floor meets wall, to keep water from further settling foundation and undermining adjacent concrete slab under dining room
tuckpoint chimney and stairwell
replace collapsed orangeburg sewerline
have 100 foot dead tree removed limb by limb
repair plugged exterior drainage system
new roof and gutters and fix dry-rot
eradicate several in-ground hornets nests after discovering each 'the hard way'
eradicate large quantities of weeping-blister inducing poison ivy
replace rotted screens behind eaves
trim tree branches over roof
scrape moss off roof
repair termite damage
termite treatment
woodpecker damage
recharge A/C
replace furnace blower motor
replace furnace
clean ducts
redon remediation
new windows throughout
replace rotted trellis on carport
repaint carport floor annually
repair rotted red cedar siding
repair drywall where roof/flashing leaked
replace chimney cover
update kitchen with new granite countertops and tile backsplash, new sink, new $220 faucet
tear out dated parquet flooring and hire asbestos abatement crew to remove the asbestos-containing 70's linoleum and 50's tile beneath it
new flooring
replace leaky, dated faucets
replace dated, rusting, skanky medicine cabints
replace dated brass doorknobs throughout
refinish hardwoods
repair chipmunk damage under slate walkways
replace flooring damaged by burst fridge waterline
pay landscaper to help you keep up with Jones's
when you sell house, pay new roadway 'user' tax of $1500
new washer and dryer
replace dated kitchen appliances
replace dated hardware on kitchen cabinetry
install new wood blinds throughout
hauls decades of accumulated shit from basement utility room
paint utility room floor
blow foam into exposed dirt-filled cinderblocks
blow foam into gap between house and carport being used by nesting birds
blow foam into weed-filled gap between sidewalk and ditch
blow foam into chipmunk nest-holes, everywhere
pull dozens of stray nails from basement ceiling beams
cover asbestos tiles in basement with peel&stick flooring
relabel mislabeled fuse-box switches
remove annoying laundry closet doors
install laundry room lighting and folding table
replace rusted exterior door handles
paint insides of closets and pantry - 3 coats. what a bitch that was...
paint ceiling of screened porch to cover mold
patch brick facade where bees have been entering
reseal A/C lineset at exterior wall where mice have been entering house
vacuum up decades of mouse shit
replace shed crushed by fallen tree, and fence
pay $8200/year property taxes for low-rated, overcrowded schools that produce juvenile delinquents who egg your house
did I miss anything, slaves?
There is no greater path to prosperity than through loading yourself up with crushing debt before you even get started working.
Well, SOMEBODY will be prosperous from it, just not you.
i guess 'free shit army member' on a loan ap isn't cutting it for Wall St banks? How dare they? Just give the new home loan, and then ask Obama for the money, seems very simple.
From Obama phones to Obama homes....
https://www.youtube.com/watch?v=tpAOwJvTOio
House prices always go up.
Unless you live in my old neighborhood in manassas park, va. I shit you not it's the only neighborhood in the entire DC area that has not gone up 1 dollar in value in the past year. Took me 6 years to break even on that place before I could sell it. Every other neighborhood in the area has gone up in value since then, some substantially. My old hood has actually LOST value since I sold it a year ago. Can I pick them or what!
maybe the US has peak population? since all economic models are based on expanding money supplies this is the death knell for central banks, or maybe they can manage deflation, they have been doing okay the last six years.
This is part of the reason why a certain group of people are flinging the doors open wide to immigration, but they haven't thought the plan through enough to think about jobs, etc.
I agree this isn't a positive development for banks -- of any kind -- deflation kills banks. In this instance, it's suicide since the proximate cause was self-inflicted.
"So bullish. It hurts!!!!!"
That Son of a Bitch has NO idea of how that phrase he uttered is going to be the 'gift that keeps on giving', probably long after he's taken a flying lesson out of a 23 story window with no umbrella...
Guess the banks better hold back even more inventory. That should help prices!
Mommy and Daddy are broke too.
I thought president Zero fixed this problem. That's what they tell me on teevee.
he has--eradicated the middle class in favor of the politicians and douchebag finaciers--while telling the folks he is on the their side--a grifter and fraud of frauds
Nice Tweet at bottom, but he forgot two things:
http://www.zerohedge.com/news/2014-10-31/ally-financial-formerly-gmac-ad...
http://www.zerohedge.com/news/2014-11-02/fbi-probe-accounting-fraud-mult...
Apparently these companies are doing the same thing as all the other companies in the industry.
O has got the unemployment rate down into the 6's, spx at record highs, cheap gasoline so consumers can have extra cash, inflation is under control and healthcare for everyone. He has that magic touch. I think O should declare himself dictator.
He was busy creating or saving millions of job, fixing all the roads and bridges and lowering the sea level. If the Republicans hadn't been fighting against him the whole way he would have had this all fixed long ago.
those 10 dollar an hour jobs for mba holders are stepping stones to appreciate real properity when O gets full dictator powers
(real prosperity = modern day slavery)
why does al sharpton want reperations for the blacks? we are in modern day slavery----and and most people you know are the slaves. and this slavery knows no racial barrier. the millinenals will rise up and sieze all the assets, cancel the national debt they did not create and clear the slate.
I can fix the housing problem overnight. Slash all real estate by 50%. Cut all prices right in half.
THAT'S probably closer to where they should BE. Suddenly, it all becomes do-able, even with so-called higher rates.
When your goods are priced properly, they sell.
Of course, the people who would lose a lot initially with lower prices won't be able to follow the idea to its conclusion...that their losses would be quickly recovered in the ensuing recovery of the market. Bird in the hand, and all that...
only if the econ was left to its own devices and the fed exited the mbs purchase tool. and if the gov got out of financing too. not going to happen though as it is just another manipulation tool of the gov...
hsg will never find its true value again...
Oh sure it will, eventually. History is very clear about that, so don't despair.
ALL manipulations come to a failed end. The market forces ALWAYS have their way, and reality reasserts itself. It does take time though, and for those of us waiting, it seems like forever.
But in retrospect it will seem to have all moved quite quickly, and people will think, "Whoa!"
Eventually means when the 'empties' rot down from neglect, or are torched by vandals. That'll be another 20-30 yrs.
Another "command economy" communist that knows "the right price" of everything.
The only entity that can tell you the proper price of anything is the free market...
We should try it, really we should. I've been reading a lot about this 'free market' thingy, and it sounds like it just might work...
No, No, No, we don't do short term pain well.....
Anything but that....
#1. "Despite an improving job market and low interest rates..."
'Improving job market'...? In what sectors and what duration (full time vs. part time)?
#2. It is possible - albeit likely the furthest thing from an NAR mind, that the millennial's have figured out that 'owning' a home (a contradiction of terms if there ever was one), is NOT what they want, based in no small degree to what they have seen take place over the past 8 years...?
#3. Home 'ownership'...? You don't 'own' a Fucking thing until the last $Le Morte is made... Meanwhile, you get to lose sleep wondering if your job will hang around long enough to make that next payment - X 30 years...? No, perhaps the whole 30+ year notion of 'home ownership' is headed back to where it once was - a place to live and raise a family, with no expectations of using the damned thing as an ATM...
Student loans? Who pays those back? I was under the impression that folks waited to retire and have the loan debt taken from their social insecurity check.
Hell, it's not first time buyers alone. It's across the spectrum. If it weren't, why would I be seeing the price decreases up and down the east coast? And I suspect the same across the country with few exceptions.
As I stated before, until prices revert 90% peak to trough, there is no market, only greater fools.
Home prices in NoVa aren't going anywhere. They have been stagnant for 6 months not moving in any direction. The same old homes for sale that aren't selling and the sellers aren't lowering the price. Home prices here are really way out of reality. I figured they would crash by now but nope. Still waiting for it so I can swoop in and buy one but looking less likely by the day in this area.
What the fuck is NoVa? Ppl need to reel it in a couple hundred yards with the acronyms. Googling i get Northern Virginia Community College, Nova the PBS show, some substance abuse center in Maricopa county, Nova Consulting Group, and the primary definition of a cataclysmic nuclear explosion of a white dwarf.... Now, which one do you mean?
/rant off
Yes you can buy a house with your food stamps...
Houses of the Oboly
Whoa! Don't be giving up an ideas now. Damn.
As noted earlier this week, Mrs Atomizer and I are looking at Hilton Head property. Over inflated birdcage for 200K. Two bedroom condo with a HOA for $350/month. Beach front ocean view.
It only yields about $25,000 ROI per year. Not going to purchase. Waste of earned money. It's best to put boots on ground before buying. FYI
Make things less expensive and more people can buy them ... duh!
Create more value adding jobs and more people can trade their labor for goods and there will be more resources to buy.
It is only because those who control the money are bad at managing both themselves and the economic environment at the same time. They believe they should have more, well beyond what they actually need, regardless of what it does to everyone else.
They have power, but they are so afraid of losing it that they collectively kill the world. Losing that fear would help both them and the world.
On that first (top) chart, I noticed two things.
First, the chart doesn't even show the real baby boomers, who were born when the WW2 vets returned home in 1945. Real baby boomers were born in 1946, 1947, and 1948. The chart quits at 65-year-olds, who would have been born in 1949, and therefore aren't really baby boomers at all.
Second, notice how the numbers drop off at the right. It appears that, for the chart as a whole, the average is 4 million persons in any particular age, but the numbers are dropping quickly at the right, so that there are fewer than 3.5 million 65-year-olds. That means that 0.5-million would-be-65-year-olds have already died, thereby donating their lifelong Social Security contributions to the Gen-Xers and Millenials. You're welcome. And, again, that doesn't count the 66-through-69-year-old "real baby boomers", who, if we extrapolate, have died off in even larger numbers, also leaving most of their lifelong Social Security contributions to the Gen-Xers and Millenials. You're welcome.
Boomers as a cohort are usually measured between 1946 and 1964 give or take a year depending on the analyst.
Okay. Thanks.
smack in the middle of the Millennial collapse
Wazzat?
I'm not sure the mortgage application count is all that bad, there's been a lot of speculation in housing for decades, if some of the amateur house-flippers are currently sitting out that's just fine by me. Just the taxes on a middle-class property in California, bought now, practically equal rent in a smaller apartment or condo. Only good old Prop 13 has kept about half the population in their old houses, keeps taxes based on acquisition cost, often a half or a tenth of current prices. I suppose the mortgage count fallling doesn't look like the economy is "recovering" because guess what it's not, beyond the dead cat bounce.
Where is that 'chart' again - I know somebody here has it... The one that plots housing prices from about ~1977 forward and the correlation between the steady rise in prices and the advent of easy credit. It is quite a stark representation of how this all came to be.
Attempting to prop up housing with infinite printing won't end well.
First Japan implodes then the US down the road.
Japan is starting to show signs of imploding. It won't take much to push it over the edge.
My lawyer just received deposit check on sale of my Brooklyn condo today..!! I have 10% downside protection for the next 2-3 weeks until the close.
The music can stop any time now, for all I care. I'll wait and buy back the same place 30-40% cheaper in a couple of years.
House flippers are equal to a used car salesman. They never own a deed, just transfer to next party owner for limited profit gain.
Owning a house deed places you in the driver seat. The Jews think Americas won't catch on to the banking scam. Trust me, they will.
It will destroy them and the corrupt skimming pennies for dollars income ponzi racket.
Career employment with a decent wage is what allows you to buy a home.
Since that is severely lacking in the U.S., it is no wonder home sales suck.
Why would you want a mortgage in this environment? Have you looked at amortization schedules lately? Talk about a screwjob. It is smarter to hook onto the parents' house. That is the best way to live debt free.
I see houses as a spider trap. It looks sweet but then you become trapped, increasing taxes, increasing insurance costs, poor craftsmanship repairs, prey to banking interest, etc.
However, if you believe in bank implosions or hyperinflation would it be better to have an overpriced box or to rent and potentially be evicted by a heavily armed landlord for non-payment?
I'm just waiting for interest rates to drop to -20% and then I'll be buying a home
the "sharing economy" HAHAHAHAHAHAHA....
We're POOR!!!!
The obvious answer is to make a FICO score of 500 excellent AAA credit!
It's already happening.
FICO score becoming as meaningless as the unemployment rate.
But they will use it against you when applying for a job.
LOL!!!
Really, shouldn't high FICO scores be a right? I mean really....
I think the theory is, with Q.E.x bail-out the assholes that destroyed our economy with the Commodities Futures Modernization Act of 2000, Regulation 1.25, Derivatives, etc.,you know the consequences of fuckery with the Firewalls our grandparents put in place, until such time as the economy moves on to the next hard-on after the refractory period ends, just like it's done cycle after cycle, generations past.
Then they figured, once the new hummer started, they could wind down the Q.E. as economic activity stiffened.
The big difference now is, there is no major wage growth driver across a large spectrum of skill sets because we don't make a fucking thing anymore.
High-tech & Wall Street don't drive wages. Making shit drives wages.
The tax revenue and wage multiplayer effect of making things dwarfs that of High-tech & Wall Street.
The lack of financing demand of a manufacturing economy is why Wall Street and Banksters dream up circle jerk investments to profit from and that's why this "recovery" is limp.
More Q.E. won't do a fucking thing except give dolts the false impression asset value is increasing.
Now that they have sucked the savings out of retires and the middle class, consumer demand is dead.
They think amnesty for 12-15 million illegals will keep middle America happy as it will keep the price of a car wash and a blow-job down from what the Q.E. would have pushed the price points on those goods up to without the labor dumping in those sectors.
Thanks to our sending all our money to China to make a few people really rich, there is no jizz in our economy. No amount of Viagra/Fed Fuckery is going to change that.
Only manufacturing jobs will do it.
If the G and Banks are doing everything possible to keep the costs of housing up, people need good paying jobs to buy a home.
Wake the fuck up people.
Well...not you people.
Thanks, Casual_O
I think I need a cigarete after reading you post.
we still manufacture pharmaceuticals, on a very large scale.
Wont be long before they allow College Indepted students to roll their college loan into their 30 year mortgage if the buy a house.
Finally someone with a little sense here ; )
if only da Gubermint could print mortgage notes......muhahahaahhahaha
It's still easy to get a loan if you have a job.
Looking for a creative way to finance 41 acres. They want $89,000, figure I can get the price down to $82,000 with the right kind of offer.
Property has a large stocked pond, large 45x95 pole barn, is about 3/4 farmland, 1/4 woods. Pretty good split.
I have $12k of my own money, but financing raw land is a tough nut. Thinking limited partnership, co-op, something along those lines.
Any ideas?
you ONLY have $12k saved?! how old are you 18?
From the NAHB newsletter this morning: "Builder Confidence Adjusts as Sales and Starts Hold Steady" everything is represented as mostly positive with some volatility. It doesn't surprise me anymore though.
Assets or Liabilites ?
What are houses?
You can either let prices drop to what they should be or you can have no sales due to no buyers with money. You cannot have both.
Funny how that free hand of the market works......
Unless you are expecting the chinese nation to come and buy up USA....
I'm 39, I've always had a decent profession (though income has leveled off completely in the last six years), and I've never bought a house.
I've bought plenty of Au and Ag, both have which have lost me about $50k Yellenbux to date.
That'll teach me to listen to ZH...
Is that 50k losses due to the PMs or due to the opportunity costs of not buying the stockmarket?
Just asking.....
I've never bought stocks.
Unless you have a spare $25,000 to $40,000 per year to spend on maintenance, repairs, and all of the other burdens associated with owning a home, nobody should be buying. Also, if you have a serious issue, there is 95% the insurance company will deny your claim. Last but not least, I looked at my property tax statements a while ago, and in Illinois you are forced to contribute to the retirments of the dolts who shuffle paperwork for your local government. The NAR is totally built and sustained based on roping new suckers into the system. One of my former real estate agents was caught stealing steaks from the local grocery store when the crash hit in 2008.
In the USA, there isn't Communism. There is just Insurance Companies.
where i live they are building communal condos-you share the kitchen with 5 other apts at $700/month -anybody in on one of those? Im talking Capitol Hill in Seattle