 Quote:
Originally Posted by sgtdmski  Once again you fail at economics 101. The market always corrects itself. Housing sales increased because of the Fed keeping interest rates low. This caused a boom in sales. As a result, individuals were able to charge more for their homes on the market. Now that the interest rates are increasing we see a decline in sales. Why??? Perhaps the simple fact remains that the prices of the homes have not decreased to match the increase in the interest rate. Eventually the market will find a way to right itself, as it is doing now. When the price of homes declines sales will increase.
QUIT SHOUTING THE SKY IS FALLING!!!!!!!!!!!!!
dmk | Exactly!
People are no longer buying houses in order to get them paid off, and live more cheaply. They're working - with banks that are aggressive about writing mortgages - and figuring out exactly what they can spend, per month, on mortgage payments.
The bottom line is that it doesn't work as well as banks say it should. People were/are just paying more for the same house, because the interest rates were lower. Unfortunately, many of them took ARMs in order to get their payments even lower - and now they're regretting it.
But you're very right in that the market is adjusting itself, as it ALWAYS does. |