So apparently after getting in big trouble for taking advantage of high risk mortgagees in the mid-2000's and supposedly causing a "Great Recession". Now folks are unhappy because Big Banks are not loaning enough money to low income higher risk mortgagees. And of course some people will claim that these decisions are race based and unfair.
G2A Here We Go Again
G2A Housing Debacle Revisited
G2A Here We Go Again
G2A Housing Debacle Revisited
8 comments:
I would say that the reluctance of banks to enter into home loans is a sign of bearishness about the economy as much as anything else. And quite possibly that home ownership itself is not seen as the safe and desirable investment by young people that it once was. In an economy where a lifetime job is a thing of the past, could a long term mortgage have the same appeal it once did?
--Hiram
And a "starter home" today is a lot different from one 50 years ago.
I still remember my working class uncles first home in Apple Valley way back when. The development consisted of a bunch of 2 or 3 bedroom homes with one bathroom, and I think the garage was an option.
I am not sure where they even build a home like that today, or who would buy it... Certainly not in Plymouth.
Here is an interesting list of cheap homes...
I still remember my first home. 14070 37th Place Plymouth... 1270 total square feet of split entry and an garage where one had to walk outside to get into the house... ~25 years ago it went for $103,000.
I have no idea how young couples manage things these days starting out. That's particularly true for me in areas of the country where for various fairly legitimate market reasons, home prices for perfectly ordinary homes are beyond the dreams of avarice. When we look for reasons why people are dissatisfied with the status quo and are willing to vote for someone who might shake things up like Trump, I would point to the extremely high home prices. The fact is, Democrats don't offer a solution for that. Trump doesn't either, but at least he offers demagoguery which works for a while in attracting votes.
--Hiram
I don't think smart fiscally conservative couples have much of a problem. They will:
- graduate High School
- get a College or Technical School degree
- start working
- get married
- live in a tiny apartment
- drive old cars
- save money for that down payment
- then have kids...
It is the folks who fail to follow that simple recipe who I think have problems. The folks who:
- fail to get their degrees
- have kids too early
- don't have a committed long term partner in life
- spend excessively instead of saving (ie trips, technology, cars, eating out, nice apartments, etc)
With this in mind, what kind of life do we think the under educated, early baby bearing, unmarried, over spending, etc people should expect to have?
Do we think they should have a 3 bedroom, 2 bath home with a white picket fence?
Or do we agree that the consequence of their choices should be a basic apartment?
But of course the average couple isn't fiscally conservative. And fiscal non conservatives once could afford to buy a house. Now they can't.
--Hiram
Personally I think most couples are moderate to fiscally conservative and can buy a home.
The problem is that many households / families are not a "couple", something that has changed drastically over the past 50 years.
And in the past could a single Mom or Dad with 2 kids afford to buy a home?
Personally I think most couples are moderate to fiscally conservative and can buy a home.
People can buy houses. But the high prices mean they can't do other things they used to be able to do, and a lot of things they can't do affect their quality of life.
People are funny about money. A few years back, a guy was quoted in the media about how he was financially struggling on an income of about a quarter million dollars a year. Of course, he became a target of massive ridicule, but I think his attitude reflected how a lot of people feel about money. People tend to spend more than they earn, and when you do that money becomes an issue. In debates I am often challenged to define what it means to be rich. It's a tactic people pick up from right wing radio. Soucheray uses it a lot. My general response to that question is that you aren't rich if you live off your income.
--Hiram
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