Network Marketing Professionals - The Housing Industry Reality By Matias Leiva
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The housing industry prices are still far from their fundamental rates. House prices are still way beyond any known relationship to rents or salaries in recorded history. Its amazing to see where the rent is these day almost at 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.
Home buyers borrowed way to much and can no longer pay the interest, this is one of the main causes of the mass foreclosures nationwide and “senators” are talking about taking YOUR hard earned money to pay for the your neighbors 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 Fannie Mae which are tax payers or onto mortgage backed security buyers. If you’re not aware of it, then it’s very clear that there will be a loan amounting to almost $ 1 trillion that will go unpaid. 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.
A return of prices to their traditional standings is a prerequisite for lending standards to return to their own traditional standings.
In today’s market, there is a shortage of first-time buyers of homes, and the high prices of these abodes have been no help to new families with children. For new families it is impossible for them to buy a home at current prices but yet our proud government has yet to talk about how lowering house prices can really help the economy. There main focus is to keep everyone in debt so bankers can earn interest on everyone.
Retiring for the baby boomers is going to be very difficult. There where 77 million Americans born between 1946 to 1964, and a third of them virtually have no retirement savings. The only money they have is in their equity and yet if they have any equity. People must sell their homes to be able to access their equity, the only trouble here is that the price has already become outrageous that no one can afford to buy them.
