Thursday Jun 20th, 12:58AM EDT
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Yesterday new home sales jumped 15.9%. That was a huge unexpected gap up in sales. What are your thoughts on the current status of the housing market?
Should the U.S. government do more to help boost the housing market?
Housing like automobiles is a terrible indicator of the countries future.
Young people have little or no job security and would be illadvised to purchase a home until well established. So the new norm may be rentals? Evidenced by the "hot" market at this time.
A true economy is built on all sectors having a small solid steady growth with a government that takes a minimal approach.
We have a government fueled by takers that overwhelms the economy and makes it impossible for a true recovery.
BE AFRAID - BE VERY AFRAID !
Thank you Neil; very well said!
why did we ever get away from the 5os and 60s when you had to have 40% down payment in cash before you cound buy any capital purchase such as a farm or house!!. I remember as a senior in HS, in mn the banker broker wanted to sell me an 80 next to Pa 160 which would have worked out perfectly, but I had only
$2700 dollars saved up working in the summers and needed $6,000 to buy the fine 80. so the farm credit system guy said probably you could get uncles aunt neighbor to co-sign for you, but to my dismay no one would, but virtually no risk at 6.8% intrest 10 yr amort.!!!! or five yr. the 30s was too fresh in there minds yet, when they all co-signed and nobody paid..Well where do you think we are sitting now!!! in the 50s all single men were drafted with no benefits,all ocs and basic and six yr obligation was for training. go back to those fabulous 50s again and you would have blood in the steets.!!!!! It is called bennetizing the nation with the Eisenhower yrs.
The FED is trying to rig the housing market as well as bonds, equities, gold, and anything else it possibly can to jump start an economic recovery which is why the stock market does not have a connection to the real economy.
For a trend trader the only thing left to trade free of FED manipulation is grains, hogs, and cattle, and some softs, but certainly not lumber.
Switch to short term bullish if the SP 500 closes over 1511.57.
The lack of good government created this mess, thank you Barney Frank and others. Forcing, or allowing, banks to be reckless in their loaning practices with the false and truly meaningless crusade for everyone to own a home has blinded many to the realities of life. Many people can't afford or care for a home. If the government is involved in any way it should only be to ensure that people who can afford homes are not unnecessarily hindered from obtaining them if they so desire. Although I am an optimist I'm afraid the worst is yet to come. This financial mess can only be the result of three things, recklessness, ignorance or the purposeful destruction of our blessed nation by enemies from within.
We are only being fooled by the housing market today. Banks are and have been holding back on millions of homes either already repossessed or in the process of being so. Once these additional homes are released on the market, the gains we are seeing will disappear. Many of the so called recovering markets will once again begin to decline at a rapid pace.
The commercial real estate markets have been propped up with phony loan renewals for years while the private home market has been trying to recover. This commercial market dwarfs the private market in real dollars. The Bankers and the Fed have tried their best to keep this from becoming common knowledge. We just don't know how truly broke we are.
The direct cause of most of the words woes relate to over priced property. the lower the price of property the higher the standard of living and vice versa ie lower repayments and lower rents = higher deposable income!
This Also means the lower the cost base of the underlying country to more efectivly compete with the ultra low cost cheats!
It should be noted that while property was in it's long run uptrend for well over a decade real wages were falling during this same period.
Using a method of average gross wage as a multiple to average house price gives an insight into just how overpriced and unaffordable property still is, as confirmation of this young people in record numbers from all levels of society can't afford to leave there parents home.
The multiple apoximatly for both the UK and the USA average over 100 years is between 2 1/2 to 3 times a mans gross anual income which would equate to the median average house price.
Currently in the UK the multiple stands at 6 1/2 times income it should also be noted that the average house size is 50% larger in the USA than in the UK this is mainly due to draconian planning by laws in the UK as a result of a rigged Market dating back to the landed gentry . Ie only certain entities are able to easily and repeatedly obtain planning consent to convert near valueless arable farm land into residential zoning, the equivalent of a lottery win!
Given the above,I think property in London is the Short of the Century especially when they wake up and smell the coffee relating to planning consent as not more than 10% of land in the UK is built upon,meaning the green belt is more of a blanket than a belt as oppose to popular belief
Little Boxes. And they all look just the same!
Markets and economies work best when left alone. Government "Help" usually causes far more damage than benefits.
In Fact, the biggest drag on the economy is big Government.
Government should be providing basic services to people and not much else.
Yes, the road to hell is paved with good intentions... and lined with billboards displaying Orwellian government newspeak. When we arrive it will be warmed with the burning of fiat currencies.
I think you jneed a job to be able to buy a house.
How about a Bank job? That's where all the money is.
I really hate to see the government try to boost any industry but a much larger segment of the work force in this country makes it's living building homes than most people realize. I was a vocational coordinator at a school who taught one segment of the home workforce and i saw my student enrollment drop from a average of 110 students to 10. So I would have to include help in this area to be job creation help.
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