Do you support the housing bubble?

[A18]

Anyone have the exact homeownership rates?

[MODU]

Anyone have the exact homeownership rates?

Is this what you are looking for?

Second Quarter 2005 homeownership rates?

[I spent the winter writing songs about getting better]

I just want it to pop soon. It'll really screw over lots of suburbanites when it does.

[TheresNoMoney]

I'm looking to buy some investment property so I'm kind of looking forward to the bubble bursting so I can get in.

[A18]

Well, you'll have to wait for a bubble to form first.

[TeePee4Prez]

I'm looking to buy some investment property so I'm kind of looking forward to the bubble bursting so I can get in.

Same here.  Not sure if this is a problem in NH with Bostonians, but here we have a lot of New York/North Jersey investors artificially jacking up the market making rental investments out of reach in NE Philly, along with single homeownership in Bucks County and South Jersey.  Philadelphia area wages have not caught up with these excess housing prices, but then again the New York housing market is downright sickening compared to ours. 

[Filuwaúrdjan]

I just want it to pop soon. It'll really screw over lots of suburbanites when it does.

Dolt

If the housing market where to *collapse* (like it did over here in the early '90's) it isn't just suburbanites that get effected; the overwhelming majority of Americans live in households that own their own home. Every single one of those families gets hurt (often very badly) and it could well plunge the entire economy into a pretty bad recession. And if the U.S economy has a bad recession, the rest of the world has a worse one.
Besides do you know what sort of family gets hurt hardest by a housing market collapse? Without putting too fine a point on it, it isn't rich people.

[TeePee4Prez]

I just want it to pop soon. It'll really screw over lots of suburbanites when it does.

Dolt

If the housing market where to *collapse* (like it did over here in the early '90's) it isn't just suburbanites that get effected; the overwhelming majority of Americans live in households that own their own home. Every single one of those families gets hurt (often very badly) and it could well plunge the entire economy into a pretty bad recession. And if the U.S economy has a bad recession, the rest of the world has a worse one.
Besides do you know what sort of family gets hurt hardest by a housing market collapse? Without putting too fine a point on it, it isn't rich people.

I would like a 30% pop though!

[opebo]

The housing bubble has raised home ownership beyond the reach of the vast majority of Americans...

Uh, a large majority of Americans do own a home.  Even the homeownership rates of Blacks and Hispanics are nearly a majority.

Obviously - people who owned homes prior to the bubble.  The Bubble, however, has removed home-ownership from the reach of the great majority of Americans who have not previously owned a home.

[Smash255]

I'm looking to buy some investment property so I'm kind of looking forward to the bubble bursting so I can get in.

Same here.  Not sure if this is a problem in NH with Bostonians, but here we have a lot of New York/North Jersey investors artificially jacking up the market making rental investments out of reach in NE Philly, along with single homeownership in Bucks County and South Jersey.  Philadelphia area wages have not caught up with these excess housing prices, but then again the New York housing market is downright sickening compared to ours. 

Those who got in at the right time made a TON of $$$$.  Nassau County (where I live) the average home value in 2000 was around $225,000, right now it is at $490,000..  Suffolk Country has seen  similar growth from about 185k to $400,000 in 4-5 years   Home values in the vast majority of neighborhoods have doubled as well & in some areas have tripled or even Quadrupled (in some of the smaller areas surrounding the Hamptons).  Even the neighborhoods that aren't that good tend to have the median value over $300,000.  The median values iN Westchester are even higher than they are on Long Island.  My home, which my parents bought back in 1980 for $63,000 was probably in the $240- $250k range 4-5 years ago would probably go for $530,000-$550,000 or so

[dazzleman]

The housing bubble has raised home ownership beyond the reach of the vast majority of Americans...

Uh, a large majority of Americans do own a home.  Even the homeownership rates of Blacks and Hispanics are nearly a majority.

Obviously - people who owned homes prior to the bubble.  The Bubble, however, has removed home-ownership from the reach of the great majority of Americans who have not previously owned a home.

What do you think created the huge increase in home prices?

[Blue Rectangle]

The housing bubble has raised home ownership beyond the reach of the vast majority of Americans...

Uh, a large majority of Americans do own a home.  Even the homeownership rates of Blacks and Hispanics are nearly a majority.

Obviously - people who owned homes prior to the bubble.  The Bubble, however, has removed home-ownership from the reach of the great majority of Americans who have not previously owned a home.

Your revised statement is as erroneous as the original.  Homeownership is at an all-time high.  This is driven by high demand, which is driven by low mortgage rates.  The recent increase in homeownership is an effect of homes coming into reach for more Americans.

[phk]

The housing bubble has raised home ownership beyond the reach of the vast majority of Americans...

Uh, a large majority of Americans do own a home.  Even the homeownership rates of Blacks and Hispanics are nearly a majority.

Obviously - people who owned homes prior to the bubble.  The Bubble, however, has removed home-ownership from the reach of the great majority of Americans who have not previously owned a home.

What do you think created the huge increase in home prices?

Exotic loans that encourage people to buy homes out of thier normal reach and speculation.

[Blue Rectangle]

The housing bubble has raised home ownership beyond the reach of the vast majority of Americans...

Uh, a large majority of Americans do own a home.  Even the homeownership rates of Blacks and Hispanics are nearly a majority.

Obviously - people who owned homes prior to the bubble.  The Bubble, however, has removed home-ownership from the reach of the great majority of Americans who have not previously owned a home.

What do you think created the huge increase in home prices?

Exotic loans that encourage people to buy homes out of thier normal reach and speculation.

If prices were pushed high by demand driven primarily by speculation, then we would actually see declining rates of homeownership, since homeownership does not count investment property.  Instead we see the opposite.  The demand is mostly from people buying a primary residence, not investment property.

I'm not sure what you mean by "exotic" loans.  Rates on plain vanilla 30-year fixed-rate mortgages are low and have been for some time.  This accounts for the bulk of homebuyers.

[phk]

The housing bubble has raised home ownership beyond the reach of the vast majority of Americans...

Uh, a large majority of Americans do own a home.  Even the homeownership rates of Blacks and Hispanics are nearly a majority.

Obviously - people who owned homes prior to the bubble.  The Bubble, however, has removed home-ownership from the reach of the great majority of Americans who have not previously owned a home.

What do you think created the huge increase in home prices?

Exotic loans that encourage people to buy homes out of thier normal reach and speculation.

If prices were pushed high by demand driven primarily by speculation, then we would actually see declining rates of homeownership, since homeownership does not count investment property.  Instead we see the opposite.  The demand is mostly from people buying a primary residence, not investment property.

I'm not sure what you mean by "exotic" loans.  Rates on plain vanilla 30-year fixed-rate mortgages are low and have been for some time.  This accounts for the bulk of homebuyers.

What about all the poor slobs who took out ARMs (Adjustable Rate Mortgages) trusting is the soundness of the system. They will inevitably see their monthly payments go through the roof.

Regrettably, this Greenspan-generated pyramid scheme is headed for the dumpster. The fundamentals for securing a loan have all been abandoned; putting traditionally unqualified applicants in a position to buy a home. 42% of all new home buyers cannot even come up with a few thousand dollars for a down payment. Equally disturbing is the fact that "nearly one third of all new mortgages this year call for interest-only payments (in California, it's almost half)"

The Fed's "cheap money" policy has spawned a "creative financing" monster and the speculation in the housing market has grown accordingly. A full 36% of homes are bought either for investment or as second homes; "the very definition of a financial bubble."

[ATFFL]

What about all the poor slobs who took out ARMs (Adjustable Rate Mortgages) trusting is the soundness of the system. They will inevitably see their monthly payments go through the roof.

This is why the good Lord gave us refinancing options.  I know a dozen or so people who have left their adjustable rate behind for a nice, low fixed rate loan.

[Blue Rectangle]

The housing bubble has raised home ownership beyond the reach of the vast majority of Americans...

Uh, a large majority of Americans do own a home.  Even the homeownership rates of Blacks and Hispanics are nearly a majority.

Obviously - people who owned homes prior to the bubble.  The Bubble, however, has removed home-ownership from the reach of the great majority of Americans who have not previously owned a home.

What do you think created the huge increase in home prices?

Exotic loans that encourage people to buy homes out of thier normal reach and speculation.

If prices were pushed high by demand driven primarily by speculation, then we would actually see declining rates of homeownership, since homeownership does not count investment property.  Instead we see the opposite.  The demand is mostly from people buying a primary residence, not investment property.

I'm not sure what you mean by "exotic" loans.  Rates on plain vanilla 30-year fixed-rate mortgages are low and have been for some time.  This accounts for the bulk of homebuyers.

What about all the poor slobs who took out ARMs (Adjustable Rate Mortgages) trusting is the soundness of the system. They will inevitably see their monthly payments go through the roof.

Regrettably, this Greenspan-generated pyramid scheme is headed for the dumpster. The fundamentals for securing a loan have all been abandoned; putting traditionally unqualified applicants in a position to buy a home. 42% of all new home buyers cannot even come up with a few thousand dollars for a down payment. Equally disturbing is the fact that "nearly one third of all new mortgages this year call for interest-only payments (in California, it's almost half)"

The Fed's "cheap money" policy has spawned a "creative financing" monster and the speculation in the housing market has grown accordingly. A full 36% of homes are bought either for investment or as second homes; "the very definition of a financial bubble."

ARMs are great if you know you'll only be in the house for a few years.  Like any option in personal finance, they make sense for some but not for others.

In my opinion, the concern over interest-only mortgages is overblown.  The argument against them seems to be "that's not how it used to be!"  I really don't see much difference between interest-only and someone who moves after five years on a 30-year mortgage--they would pretty much only be paying interest during those first five years anyway.  At the beginning of a 30-year mortgage you see equity building mostly from appreciation, rather than from paying principle.

Yes, there is speculation in the market (there always is) and this speculation is helping to drive demand and prices.  But, as you point out in your second paragraph, demand is also being driven in large part by first-time homebuyers who were "traditionally unqualified".

[Smash255]

The housing bubble has raised home ownership beyond the reach of the vast majority of Americans...

Uh, a large majority of Americans do own a home.  Even the homeownership rates of Blacks and Hispanics are nearly a majority.

Obviously - people who owned homes prior to the bubble.  The Bubble, however, has removed home-ownership from the reach of the great majority of Americans who have not previously owned a home.

What do you think created the huge increase in home prices?

Exotic loans that encourage people to buy homes out of thier normal reach and speculation.

If prices were pushed high by demand driven primarily by speculation, then we would actually see declining rates of homeownership, since homeownership does not count investment property.  Instead we see the opposite.  The demand is mostly from people buying a primary residence, not investment property.

I'm not sure what you mean by "exotic" loans.  Rates on plain vanilla 30-year fixed-rate mortgages are low and have been for some time.  This accounts for the bulk of homebuyers.

What about all the poor slobs who took out ARMs (Adjustable Rate Mortgages) trusting is the soundness of the system. They will inevitably see their monthly payments go through the roof.

Regrettably, this Greenspan-generated pyramid scheme is headed for the dumpster. The fundamentals for securing a loan have all been abandoned; putting traditionally unqualified applicants in a position to buy a home. 42% of all new home buyers cannot even come up with a few thousand dollars for a down payment. Equally disturbing is the fact that "nearly one third of all new mortgages this year call for interest-only payments (in California, it's almost half)"

The Fed's "cheap money" policy has spawned a "creative financing" monster and the speculation in the housing market has grown accordingly. A full 36% of homes are bought either for investment or as second homes; "the very definition of a financial bubble."

ARMs are great if you know you'll only be in the house for a few years.  Like any option in personal finance, they make sense for some but not for others.

In my opinion, the concern over interest-only mortgages is overblown.  The argument against them seems to be "that's not how it used to be!"  I really don't see much difference between interest-only and someone who moves after five years on a 30-year mortgage--they would pretty much only be paying interest during those first five years anyway.  At the beginning of a 30-year mortgage you see equity building mostly from appreciation, rather than from paying principle.

Yes, there is speculation in the market (there always is) and this speculation is helping to drive demand and prices.  But, as you point out in your second paragraph, demand is also being driven in large part by first-time homebuyers who were "traditionally unqualified".

As someone who has worked in the mortgage industry your correct.  Th bigger problems come from people taking MTA type loans (where they can ppay 1%), but have unpaid Interest being added to the balance.  Only those who are really into speculation should take those type of mortgages.  Also those who take stated loans cause issues.  Not too much that those who are paid differently, but loans in which to meet various debt ratios someone who lets say wouldneed to make $70,000 for those ratios to work, but only has an income of $45,000.  Stated loans tend to come with a higher rate since your not pporoving what you make, but people do take them & generally if you can't meet the ratios you can't afford the home.  Bottom line when taking a loan you need to look at everything how long your going to be in that property, would you want to do with the property, your income, your particular market.  Sometimes the interest only loans are the best, sometimes they aren't (your dead on about the principal not going down much in the first few years of a convential loan).  Things like the MTA with that 1% could get some people in real troube (their is a cap on how much it can rise, but then that 1% option is taken away & usually goes away after 5 years).  Its only for those who really know what they are doing. 

The biggest trouble your going to see home owwners will have with their loans are those who took the plan that was the cheapest, just because it was the cheapest & what they can best afford instead of what the most sense to them with their goals

[Blue Rectangle]

As someone who has worked in the mortgage industry your correct.  Th bigger problems come from people taking MTA type loans (where they can ppay 1%), but have unpaid Interest being added to the balance.  Only those who are really into speculation should take those type of mortgages.  Also those who take stated loans cause issues.  Not too much that those who are paid differently, but loans in which to meet various debt ratios someone who lets say wouldneed to make $70,000 for those ratios to work, but only has an income of $45,000.  Stated loans tend to come with a higher rate since your not pporoving what you make, but people do take them & generally if you can't meet the ratios you can't afford the home.  Bottom line when taking a loan you need to look at everything how long your going to be in that property, would you want to do with the property, your income, your particular market.  Sometimes the interest only loans are the best, sometimes they aren't (your dead on about the principal not going down much in the first few years of a convential loan).  Things like the MTA with that 1% could get some people in real troube (their is a cap on how much it can rise, but then that 1% option is taken away & usually goes away after 5 years).  Its only for those who really know what they are doing. 

The biggest trouble your going to see home owwners will have with their loans are those who took the plan that was the cheapest, just because it was the cheapest & what they can best afford instead of what the most sense to them with their goals

I hadn't heard of MTA loans; they sound dangerous.

If average joe homeowners are taking advantage of aggressive loans to turn their primary residence into a risky investment, then that's a bad thing--for them.

[Smash255]

As someone who has worked in the mortgage industry your correct.  Th bigger problems come from people taking MTA type loans (where they can ppay 1%), but have unpaid Interest being added to the balance.  Only those who are really into speculation should take those type of mortgages.  Also those who take stated loans cause issues.  Not too much that those who are paid differently, but loans in which to meet various debt ratios someone who lets say wouldneed to make $70,000 for those ratios to work, but only has an income of $45,000.  Stated loans tend to come with a higher rate since your not pporoving what you make, but people do take them & generally if you can't meet the ratios you can't afford the home.  Bottom line when taking a loan you need to look at everything how long your going to be in that property, would you want to do with the property, your income, your particular market.  Sometimes the interest only loans are the best, sometimes they aren't (your dead on about the principal not going down much in the first few years of a convential loan).  Things like the MTA with that 1% could get some people in real troube (their is a cap on how much it can rise, but then that 1% option is taken away & usually goes away after 5 years).  Its only for those who really know what they are doing. 

The biggest trouble your going to see home owwners will have with their loans are those who took the plan that was the cheapest, just because it was the cheapest & what they can best afford instead of what the most sense to them with their goals

I hadn't heard of MTA loans; they sound dangerous.

If average joe homeowners are taking advantage of aggressive loans to turn their primary residence into a risky investment, then that's a bad thing--for them.

MTA loans generally have limitations based on Loan to Value & what not ( that you can't puut 5% down on a home & go into an MTA), but it is still quite risky.  It can be good for investment purposes (if done right), but has many issues.  Bottom line when someone is looking into a mortgage they should plan out what they expect to do, how long they plan on living in the house, the current structure of the market, their own income.

Arms & even Interest Only  are generally good when you first move into a home ,or  plan on living for a short time because they offer lower rates, payments & taking a convential thirty year fixed will typically be at a hgher rate.  However, the key is they should be taken to INCREASE CASH FLOW so the $$ can work in different areas, other investments, more savings, etc.  However another problem some encounter is that either the arms or the Interest Only loans is the only thing they can afford at the time.  That is not the purpose of them.  Once the adjustable period on the arm is up the rates will usually go up & once the Interest Only portion is up the payments will go up.  If someomne takes these types of loans soley for the purpose that it is the only loan they can afford they get screwed once that time is up unless their income shoots up during the time. 

I think most people when they first move into a home should take an ARM in the first few years, because the vast majority will re-finance within 5 years anyway (if they are even in the house that long).  However it should be done because it offers someone more flexibility with their $$, not because its the difference in them being able to afford the home or not. 

[opebo]

The housing bubble has raised home ownership beyond the reach of the vast majority of Americans...

Uh, a large majority of Americans do own a home.  Even the homeownership rates of Blacks and Hispanics are nearly a majority.

Obviously - people who owned homes prior to the bubble.  The Bubble, however, has removed home-ownership from the reach of the great majority of Americans who have not previously owned a home.

What do you think created the huge increase in home prices?

An attempt to correct the error of supply side economics with low interest rates.  Obviously Keynesian push in the form of redistribution is the remedy called for.