Network Marketing Professionals – The Housing Industry Reality
The housing industry prices are still far from fundamentals. House prices are still far beyond any known relationship to rents or salaries in recorded history. It is amazing to see the amount of rent these days, which is equivalent to almost 3% of the yearly purchase prices. Mortgage rates are at 6% so it cost nearly twice as much to borrow money from the bank than to simply pay rent. If you were to add up the total amount you pay in terms of monthly mortgage, insurance and maintenance, it will amount to almost 9%. Anyone who buys today will immdiately incur losses for the next five to seven years, because rents and salaries are far from reality.
Many house buyers borrowed too much that they can no longer pay the interest, which is the main reason for mass foreclosures nationwide, and some unscrupulous senators are even talking about taking your hard-earned money to pay for your neighbor’s mansion.
Banks generally have no problem loaning whatever amount the borrower asks, as long as they can repay the loan. By reselling the loan they put all the risk onto the Federal National Mortgage Association (FNMA), which consists of the taxpayers or onto mortgage-backed security buyers. If you are not aware its very clear that there is about 1 trillion dollars of loans that will not be repaid. Now that this trillion-dollar debt will not be paid, the FNMA is under pressure to avoid buying high-risk loans, with many investors not even wanting to touch mortgage-backed securities.
For lending standards to return to their traditional standings will mean that prices will have to return to their traditional standards.
In today’s market, there is a shortage of first-time buyers of homes, and the high prices of these houses have been no help, especially those new families with children. It is impossible for new families to buy a home at their current prices, and our government has yet to discuss the merits of lowering house prices in order to help our economy. Their main objective is to keep everyone in constant debt so that bankers can earn interest on everyone.
Retirement for those belonging to the baby boomer generation will be very difficult. There were 77 million Americans born from 1946- 1964 and 1/3 of them have zero retirement savings. The only money they have is in their equity, and even the existence of that is doubtful. For them to be able to access their equity one must sell their home, but here is the problem again no one can afford to buy at these outrages prices.
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