Kevin Drum points to an article in the LA Times on housing forclosures. Wow!
I’m not sure who else cares about the housing market, but as someone who’s generally interested in fiscal policy this is a bit alarming. Wow.
The housing market is just experiencing a significant market correction. It was overpriced. Interest rates should be raised, not lowered, if anything. But keeping them at 5.25 seems to be the right bet at the moment.
I don’t see cause for significant alarm. This increase is a natural consequence of the poor lending practices of recent years. My guess is that it will even out in 1 to 2 years.
As for the international banking community cutting off US investments, does anybody else hear a refrain of “Subprime lending? I’m shocked, shocked!” *Every*body has known this was happening, and that it was just a matter of when the mortgage bubble would burst.
As for myself, I’m thinking it might be an interesting time to get into real estate.
How prophetic this article was! With the recession that this country has had to deal with over the last several years the numbers in this article pale compared to what is going on now. While I would submit that much of this started by the lending practices that were in place 4-6 years ago, many foreclosures have now happened because of the high unemployment rate and decline of housing prices across the board. Unless this country gets in gear and reduces federal spending so that businesses will feel more comfortable in the stability of our economy and not worry as much over tax increases that they face, employment will remain sky high and housing will continue to slide into the abyss.
Our housing market is truly hurting now, all of this could have been avoided if the predatory lending practices that were in place as well as people who were getting these loans actually had the income to pay for them. That is how it started, now with the high rate of unemployment and the slide of housing value I worry that it could be years before this mess corrects itself.