Lower mortgage rates no silver bullet – Dec. 4, 2008
by Tom on December 6, 2008
in Market Musings
As the economy continues to weaken, however, some economists say the answer to the housing crisis lies in stabilizing the job market. As more people lose their incomes, more fall behind in their mortgages and lose their homes. This trend will accelerate the number of foreclosures and keep prices in a downward spiral.
Lower mortgage rates no silver bullet – Dec. 4, 2008.
I’m not going to get into the details of why I don’t think that the Treasuries 4.5% plan will work because I’ve already written about it here and here and also here. Plus I’m going to talk about it in this week’s Mortgage Market Week in Review (sign up if you’d like to get a copy).
But I’m pleased to see that someone is starting to finally realize that the answer to the housing market is in the jobs market.
Very few people who want to buy a house right now (in my experience) can’t buy a house. They might not be able to buy the one they really wanted (for instance, I had someone who wanted to buy a fixer upper but needed an additional 5% downpayment for that). But they can buy a house.
I’ve written my book, Straight Talk About Mortgages – How to Survive and Thrive in Today’s New Mortgage World to help people realize that it is possible to get a mortgage in today’s market.
The bigger issue that I’m seeing right now is jobs. People don’t want to buy a new house because they are concerned about their hours being cut, their pay being cut, their job being eliminated etc. If we took care of that, we’d take a big chunk out of what hesitancy that buyers have in today’s market.
I’m working on some ideas how to change that and will write more on those later.
