Posted by BertsPost on December 30, 2008 |
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Home prices plunged again in October giving an over 19% decline year over. In major cities that decline is closer to 25%.
Interest rates are so low right now that you could get a 30 year fixed around 5%. So wouldn’t this spark the same time of housing boom that happened before? Some people think that is what will be happening, but they are wrong.
See back in 2001 we didn’t experience sharp declines; the values at the time were stagnant. We have a situation now where people have negative equity and are having a hard enough time keeping their own house rather than buy investment properties. Also, the main reason for the housing boom was financing. Banks were lending money to anyone with no money down. Good luck getting a mortgage with even excellent credit nowadays.
Due to the credit meltdown and collapse of these banks, there will never be a housing boom of that magnitude ever again. I am hoping around 6 more months, housing will stop losing it’s value and eventually turn itself around.
