Given the very strong likelihood of less federal subsidies for housing, prices will drift further down.
As much as I would like to believe that the government and the Federal Reserve will give up on trying to reflate housing prices, this seems like wishful thinking to me. You have the following forces all desperately trying to reflate the housing bubble:
The Federal Reserve, which is keeping rates low to lower mortgage rates (which tend to inflate housing prices)
Christine Lagarde of the IMF is talking about the U.S. need to arrest housing price declines
The Obama administration is talking about doing something to allow people to refinance at the current low rates. Evidently, these people cannot currently refinance either due to being underwater on their mortgages or being lousy credit risks. If these refis occur, it is in all likelihood that the mortgages will be guaranteed by the government.
The NAR and other private interests will continue lobbying Congress to throw more good money after bad in the housing market.
The FHA continues to make very large loans ($600,000+) when it is supposed to be a lending program for financially disadvantaged people.
Housing prices will decline, I'm relatively certain. However, it's just going to take longer for things to hit bottom with all the false demand being generated.
Copyright iTulip, Inc. 1998 - 2016 - All Rights Reserved
Opinions expressed herein are those of the posters, not those of iTulip, Inc., its owners, or management. All material posted on this board becomes the intellectual property of the poster and iTulip, Inc., and may not be reposted in full on another website without the express written permission of iTulip, Inc. By exception, the original registered iTulip member who authored a post may repost his or her own material on other sites. Permission is hereby granted to repost brief excerpts of material from this forum on other websites provided that attribution and a link to the source is included with the reposted material.
Nothing on this website is intended or should be construed as investment advice. It is intended to be used for informational and entertainment purposes only. We reserve the right to make changes, including change in price, content, description, terms, etc. at any time without notice. By using this board you agree that you understand the risks of trading, and are solely responsible for your own investment and trading decisions. Read full legal disclaimer.
Journalists are not permitted to contact iTulip members through this forum's email and personal messaging services without written permission from iTulip, Inc. Requests for permission may be made via Contact Us.
Objectionable posts may be reported to the board administrators via Contact Us.