Here's a graph of home prices over the last several decades. The faster they rise, the faster they fall. Where is the crises? Home prices are doing exactly what all asset bubbles do. They deflate. Why should we treat this asset deflation any differently? When the tech stocks crumbled, I didn't see a bail out of tech stock owners. When the commodity bubble burst, I didn't see a bail out of commodity traders. When every one's 401K crashed and burned this year, I didn't see a bail out of mutual fund investors.
Why exactly should we be bailing out home owners who lost value in their home. Like all assets you purchase, you accept the risk and the reward as your own. You own the profit of your decision, just as you own the risk.
Why do we now feel the need to give special protection to investors who lost their shirt on their investment? The faster it rises, the harder it falls.
The fact that we are bailing out any homeowner is political grandstanding.
http://meganmcardle.theatlantic.com/archives/2009/02/the_renterowner_divide.php
ReplyDeleteGood read about renters subsidizing high housing prices through mortgage bailout. Housing prices are still 50% higher than 2001.
The more of a family's income that goes towards housing, the less discretionary income they have for other things such as education.
Also see and sign petition along with 68,000 others.
http://angryrenter.com/
http://tinyurl.com/renterownerdivide
ReplyDelete"It occurs to me that while there is a big conservative/liberal split on the Obama foreclosure plan, there may be a bigger divide between renters and owners. I think that most of the people supporting the mortgage plan really do feel like falling home prices is an obvious catastrophe.
I also think that most of them own homes. Because, of course, if prices stay high, where is the money coming from to support them? Well, from people like me, who do not currently have a home to sell, but would like to acquire one in the not-terribly distant future. Keeping people and banks from selling at a loss requires that I buy a house which is overpriced. With the exception of Detroit, all 10 cities broken out by the Case/Shiller house price index show that as of December, home prices were still at least 15% higher than they were in January 2000; their 20-city composite index was still up over 50%."