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A Long Way Down |
| Published: August 19, 2007, 11:22 am |
| Tags: economy, real estate musings, mortgage musings, credit bubble, housing bubble, housing market |
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Media pundits are tripping over themselves to be the first to “call the bottom” of the housing market now that the Fed has stepped in to lower the Fed discount rate. Remember the discount rate is the rate that banks pay the federal reserve to borrow money; its not the rate you borrow money from the banks. As Dr. Housing Bubble points out, regardless of the recent Fed action we’re still very much in the throws of the housing bubble. Dr. HB looks at markets across the country and ascertains correctly that we’ve only just begun to unwind a massive, spectaculor, devestating credit and housing bubble. Here are a few signs that we’re only going to feel more housing-related pain in the coming months: Credit is still materially more expensive than it was 6 weeks ago. This reduces borrowing power of home buyers which will depress prices. The additional credit cost also makes a percentage of refinance candidates ineligible due to the increased debt [ Full article ] |
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