The housing industry prices are still far from fundamentals. House prices are still way beyond any known relationship to rents or salaries in recorded history. It is amazing to see the amount of rent these days, which is equivalent to almost 3% of the yearly purchase prices. With mortgage rates are at 6%, it costs almost twice as much to borrow money from the bank than to simply pay rent. If you were to add up the total amount you pay, in the form of monthly mortgage, insurance and maintenance, it will amount to almost 9%. Anyone who buys today will immdiately incur losses for the next five to seven years, because rents and salaries are far from reality.

Home buyers borrowed way to much and can no longer pay the interest, this is one of the main causes of the mass foreclosures nationwide and “senators” are talking about taking YOUR hard earned money to pay for the your neighbors mansion.

Banks hand no problem loaning whatever the borrowed asked for as long as they could then resell the loan. By reselling the loan they put all the risk onto the Federal National Mortgage Association (FNMA), which are the taxpayers or onto mortgage-backed security buyers. If you are not aware its very clear that there is about 1 trillion dollars of loans that will not be repaid. Now that this trillion-dollar debt will not be paid, the FNMA is under pressure not to buy high-risk loans and many investors don’t even want to touch mortgage-backed securities.

A return of prices to their traditional standings is a prerequisite for lending standards to return to their own traditional standings.

In today’s market, there is a shortage of first-time buyers of homes, and the high prices of these abodes have been no help to new families with children. For new families it is impossible for them to buy a home at current prices but yet our proud government has yet to talk about how lowering house prices can really help the economy. There main focus is to keep everyone in debt so bankers can earn interest on everyone.

Retirement for those belonging to the baby boomer generation is going to be very difficult. Around 77 million Americans were born between 1946 to 1964, with a third of them virtually having no retirement savings. The only money they have is in their equity, and even the existence of that is doubtful. For them to be able to access their equity one must sell their home, but here is the problem again no one can afford to buy at these outrages prices.

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