patrick.net

Interesting quote from article.

"Also, the National Association of Realtors said last week that the median down payment has sunk to 9% for home buyers this year, its lowest level since 2009. "

We are in for a good ass kicking in our future. You can bet on it. The average buyer this year has only 3% equity after you take away the 6% realtor fees. That can be whipped out pretty quick in this market and make them unable to sell like the other half of mortgage owners. Greed kills markets. We are not done the stupidity yet folks. As the quote above attests, we are back at it.

RentingForHalfTheCost says

We are in for a good ass kicking in our future. You can bet on it. The average buyer this year has only 3% equity after you take away the 6% realtor fees. That can be whipped out pretty quick in this market and make them unable to sell like the other half of mortgage owners. Greed kills markets. We are not done the stupidity yet folks. As the quote above attests, we are back at it.

Couple that with the fact that the amount of jumbos being taken out are now back to 2007 levels, a big ass kicking indeed.

robertoaribas says

the sarcasm was so obvious my dog caught it!

That's because your dog is smarter than you are, although less cute (or at least that's what all my gay friends in San Francisco, think).

RFHTC and Goran,

While rational thought does agree with your commentary on unsustainable consumer behavior, reality may well dictate otherwise. The old adage, "markets can stay irrational longer than you can stay solvent" is sort of an ugly fact of life. There should be no question in your minds that the government and Fed have gone full retard and WILL see to it that house prices go up, no matter what headwinds there are to fight. The Fed has already chased hordes of investors out of bonds and into RE. Many have also abandoned equities for RE too since the stock market is insanely volatile and being dominated by HFT bots.

Also, more than half of the people in the US are house owners, or part of a family that is run by house owners, so it is accurate to say that "most" Americans want house prices to go up. These people vote, and our esteemed leaders generally try to make their largest constituency happy so that they can get re-elected.

bmwman91 says

These people vote, and our esteemed leaders generally try to make their largest constituency happy so that they can get re-elected.

I understand this aspect. One would hope that they realize paying less for a house leaves more money for other things...

Goran_K says

I understand this aspect. One would hope that they realize paying less for a house leaves more money for other things...

Bro, what's the point in anything if you can't HAVE YOUR OWN PLACE. I mean fuck, ice cream doesn't even taste good if it comes from a rental fridge. Vacation...what, so I can come "home" to an apartment? If I don't own a home, how will I EVER retire?!

A strikingly small number of people actually possess the mental fortitude to do a rational cost-benefit analysis of their own life. Or even if they do have the mental fortitude, they have a big ego, personal biases or social pressures blocking the way.

bmwman91 says

Goran_K says

I understand this aspect. One would hope that they realize paying less for a house leaves more money for other things...

Bro, what's the point in anything if you can't HAVE YOUR OWN PLACE. I mean fuck, ice cream doesn't even taste good if it comes from a rental fridge. Vacation...what, so I can come "home" to an apartment? If I don't own a home, how will I EVER retire?!

A strikingly small number of people actually possess the mental fortitude to do a rational cost-benefit analysis of their own life. Or even if they do have the mental fortitude, they have a big ego, personal biases or social pressures blocking the way.

You forgot that kids have no self-esteem unless they grow up in an "OWNED" house and that house-owners are selfless community builders!

Take places like NYC, where most residents are renters. That's why they have rent control in NYC, because, these people vote it in.