Skip to comments.Trapped by the mortgage meltdown
Posted on 09/14/2007 5:37:16 AM PDT by Hydroshock
NEW YORK (Money Magazine) -- Whether you're a home seller, owner or buyer, by this point you've got to be feeling a little rattled. The bad news about the housing market seems never ending: Foreclosures have more than doubled over the past year.
Sales of existing homes are off 11 percent from this time last year. At that rate, it will take at least nine months to work off the inventory of unsold homes. And median home prices in July (the most recent figure available) dropped for the 12th month in a row.
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Worse yet, all that happened before problems in subprime lending expanded throughout the mortgage market and beyond, creating what's popularly being referred to as the credit crunch.
While it's too soon to see the impact reflected in the numbers, the immediate future is clear: As lenders tighten their borrowing standards, fewer people will qualify for mortgages.
Fewer qualified buyers can only mean that housing prices will slump further. Worst of all, economists don't see much chance for a turnaround until mid- 2008 and possibly into 2009.
(Excerpt) Read more at money.cnn.com ...
They had a story in the paper here in S. Florida about houses and condos that had been on the market for over a year. There were hundreds and hundreds in W. Palm Beach. It’s fugly.
Not only are sales down and construction down, the prices sub contractors are making now are also down to the point of pressuring wages lower and many people out of work.
We are talking about recession here. There will soon be no money available for anything because the circulation and availability of money has literally stopped.
Check out Stockton Ca. They have the booby prize of the most foreclosures per capita in the US.
It’s not just residential, and not just Florida.
Well, this is what happened in the last housing recession.
I bought my beautiful little townhouse in Alexandria, VA in 1989. It went down in value for the next seven years before the prices began turning around in 1997 or so.
I remember saying to my mother, after several years of home ownership, “so, what’s all this talk about building equity?”
This, too, shall pass.
This is a little concerning for me, but also a positive sign.
We’re looking to buy our first home within the next 6-9 months. Certainly having lower, more sane prices will help.
However, we’ve had credit issues in the past, and while we’ve resolved them our “good credit” score is not where I’d like it to be. My concern is that tighter lending practices will hinder us.
But at the end of the day, I’m not overly fretting. Just saving more for a larger down-payment.
Does this mean that the illegals will be going home?
I for one would not buy a house unless I could afford 120% of the total monthly cost, putting 10% down on a 30 fixed note. And I buy a house to make it a home, so if it goes up, good, if not oh well I have to pay to live somewhere.
I agree! I put down 22 1/2%, and never regretted that.
No, it means they'll need to go on welfare.
A little advice for someone who has seen down tight markets before. Cash is king. If you can bring a far bit of cash, say over 10% down or better yet over 20% they are more likely to be forgiving on a few nicks on your credit.
Save up, buy a house with cash.
Swallow your pride, look for something nice yet inexpensive, and buy it outright.
Stay the he11 out of debt.
The whole “mortgage meltdown” thing is the result of people buying more than they could afford, in an area that was overpriced because everyone bought into the “I’ll pay later” BS of loans.
Probably not. It will make housing more affordable for them.
Actually, I feel just fine. The economy seems to be doing just fine.
Sadly,you are probably right. *sigh*
Woopdidoo. I'm concerned that the financial idiocy of others with trigger a recession, but that's life. Recession's happen. But as a homeowner, I'm not feeling rattled at all. I live in my home and intend to stay for a while. We bought at a good price. Life is good.
Prices might not turn around for two whole years? Oh the horror. Hell, two years is a blink of an eye. But hey, news writers need to fill all the blank space around the advertisments with something.
I can see you haven’t been to the grocery store lately.
A less than perfect credit score is a big excuse by lenders to ream you on higher interest rates, if you are so lucky to even find a lender. And they will nitpick the littlest item on a credit report.
No matter if you have always been on time on a mortgage or auto loan for the past 3 years. A 50.00 doctor bill not covered by insurance and misplaced by the billing company is all it takes.
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