America's Leading Choice For Real Estate Information
NEWS »»What happens when the government stops supporting the Housing Market?
- April 5,2010
On April 30, the Tax Credit will be gone. Banks seem to be holding ’shadow’ REO inventory that has been reported in the 4-8 million range. Interest rates are set to go higher because of all of the government debt that has been added to the books trying to avert all this. However, the real scary issue is relayed in a recent Charlie Rose interview with housing expert Robert Shiller: Charlie Rose: You’ve said that 90% of the housing market is supported by the government. Robert Shiller: Well, it’s 80% or 90%. Really almost the whole market now is government. And we know this can’t last. Rose: And that means prices are being artificially inflated? Shiller: It seems to. Government support is especially prominent in sales of existing homes, which shot up to over 6 million on an annual rate in November 2009, the month that the home buyer tax credit initially was supposed to expire. Fannie Mae has reported the rate of serious delinquencies (90 Days overdue) for conventional loans in its single-family guarantee business jolted to to 5.52% in January from 5.38% in December. This is a 100% increase since January 2009. But look at the chart below and explain to me how we are anywhere near an end to this housing crisis! It is our stance that we still have some real issues to work thru before we can claim “an end to the housing crisis”. Jason Roberts Founder & CEO www.SellMyHouse.com
