Today the FTV media is busy spreading the "housing recovery" story around. They are laying it on pretty thick, too.
- But something is not quite 'right' here.
The 'meme' is that the rise in mortgage interest rates hasn't really had all that much of an impact on home sales, thus we must be having a housing recovery.
The rise in mortgage interest rates has had a HUGE effect, however.
- Mortgage applications have fallen off the proverbial cliff as interest rates climb.
Taken in the context of "cash buyers" constituting the bulk of increased sales, they certainly are NOT the financially shredded middle class.
- Do you know a lot of people that can buy a home cash outright without needing a mortgage? Seriously, think about that for a moment.
I think the "cash buyers" are INVESTORS (TBTF banks, hedge funds) doing the buying (hot money seeking a 'return' in a ZIRP environment), not Mr & Mrs Main Street (who have no money).
Wednesday, 21 August 2013
Something is not quite right..................from Rico
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2 comments:
Wife and I just bought our retirement home, and paid cash for it. Nope, not at all wealthy.
The old house sold quick and for a profit, it's downtown with a 2 mile commute to the state capital. That profit, plus our savings, plus both of our cashed out 401ks (bammie is just going to find a way to steal it anyway) let us do it.
No more money, but zero debit.
Pass the Jack Daniels and the 45 ACP, I feel a song coming on.... :)
Here in the Bay Area, the cash buyers are Asians seeking a safe haven for their assets. They will often install a child in a school or business in Silicon Valley and buy them a house to live in.
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