Why Home Buyers Aren't Buying

Wallet Pop:

Last week, the news broke that interest rates hit yet another low: 4.45% on a 30-year-fixed and a stunning 3.87% on a 15-year fixed rate loan. At the same time, home prices are at or near bottom in most American cities.

Apparently everything's on sale, when it comes to real estate, Affordability is near an all-time high.

Read the whole story: Wallet Pop

Comments

[Wupta]

08:52 AM on 10/16/2010

Prices of homes are still high. They will drop further. I am a realtor and have been one now for thirty years. It isn't rocket science the banks and govt. are in a constant struggle to maintain prices. They will fail. The effect of the new guideline for financing reduced dramatically the pool of qualified buyers add to this the high chronic unemployment. Increases across the board of inflation and taxes pushing the cost of living up(if you don't believe me just look at your grocery bills never
mind gasoline) I can continue but I'm sure you get the picture. Just to add we may still be thirty percent away from the bottom.

[blueken]

10:28 AM on 10/15/2010

Given the practice of selling mortges in bundles, than splitting up those bundles, at what point will it be safe to say that a property is free and clear? I imagine a lot of housing stock has a hard time proving title. The banking industry has become very careless, and we as a society are paying the price. When I made my last mortgage payment, my bank told me they no longer provide a mortgage to burn, instead I had to pay $50 for a proof of ownership free and clear form from the bank. We need strickter banking rules. I know it is shutting the barn door after the cows got out, but I don't want my children and grandchildren to have to see this happen again.

[mountainweb]

09:55 AM on 10/14/2010

You missed the fact that the title companies are NOT issuing title insurance on properties that the lender cannot PROVE they have the title to. The banks and lending companies are pulling homes off the market until THEY can prove they have the paperwork and the titles....

[sdmcmla]

02:07 AM on 10/14/2010

#6, 7, 8, 9, and 10. People are 'effin broke?

[hypnotoad72]

12:34 PM on 10/14/2010

#11 - people are going back for more college because we're "uneducated"... or other claimed reasons...

And reasons #12 - 42^(70-1): http://motherjones.com/kevin-drum/2010/01/vicious-cycle-stagnant-wages

[sdmcmla]

10:51 AM on 10/15/2010

Fanned, love your avatar. Make it so.

[Old Claudius]

09:23 PM on 10/13/2010

Of the "five" reasons given, 2, 3, and 5 are all the same one, and number 4 is a non-reason.

2, 3, and 5: The "shadow inventory" of 7 million homes hitting the market like a landslide, in a recession, with most of the buyers (who bought them before) out on the street and not buyers anymore (for damage done their credit ratings, if nothing else), is going to drastically impact the market. Prices are going to roar down. No point buying now, unless one has to do something with a quantity of money real quick --and those with this problem are going to be those who make a lot of money during the recent swindler's free-for-all--. Everybody else is (5) keeping their options open while they (3) wait for the market to bottom after the (2) shadow inventory opens the floor.

4. is a non-reason because the unemployed and under-employed do not buy homes at any time, except, of course, when shysters and swindlers are hard-selling a swindle and making liar-loans for those, to get inventory to securitize, bundle and sell again and again, to cheat investors who trust them, for the famous names of their firms.

It is actually the rampant inflation now occurring that is keeping normal buyers out of the market: Everything else is costing them more, while recession is preventing their wages adjusting. As for investing in inflation, until the bottom that is a loser, too.

[kirkland]

03:45 PM on 10/13/2010

1) the banks aren't lending 2) real estate remains over valued ( one reason why banks aren't lending...the appraisals now reflect real value not bubble value ) 3) very few people in America who are not currently in a home qualify to buy ( forclosure , unemployment, low paying jobs in sectors which are hiring ). The analysts try to make it all so complicated - it's absurd.

[Shaun Hensley]

03:40 PM on 10/13/2010

Bush said it best.

"Fool me once ... shame on...shame on you, fool me can't get fooled again."

[castleblanca]

02:45 PM on 10/13/2010

Reason #6: They are scared s&@*less.

[LibertyRoy]

01:12 PM on 10/13/2010

If rates were zero (all I had to pay was principal over 30 years) I would still not buy because the value of the house itself is bound to drop. The unwritten rule is that people can afford a house at 3x their monthly income. The average house sells for $173k while the average household income is only $53k. We are still about 10% over-valued on homes and they need to drop more.

[wtf-please]

11:24 AM on 10/13/2010

..and they are waiting for the next abuse of greed scandal to bring the financial system to it's knees again...S+L crisis, corp accounting scandal, hedgefund blow up,insider trading,stock manipulating scandals,tech bomb, subprime,foreclosure fraud,cdo excess.. whew.. yea I want to participate in our system.. Smart money is gaming the system in their own way.. :)

[wtf-please]

11:21 AM on 10/13/2010

Buyers know so many people that have just stopped making their house payments in disgust over the system they know a bunch of inventory will drive prices lower and the fact that 2/3 of America cant get a loan.. or dont really want one in the system we have..

[Kiffanik]

11:19 AM on 10/13/2010

Prices haven't bottomed out, and credit is tougher to get now. Banks are going to have to get serious about the value of all these bad mortgages sitting on their books, start actually modifying loans. My concern is that the number of people who will make it thru this recession with their credit in good standing is probably relatively small. What happens during a recovery if people now want to buy, but don't have the credit necessary because of the recession?

[stape45]

09:39 AM on 10/13/2010

A quarter-million dollar asking price on a 3-bedroom house may be one reason people aren’t buying. And expecting $50,000 up front, may be another reason.

[Billy Jack]

09:09 AM on 10/13/2010

It doesn't matter how low interest rates are, people can't buy if they don't have jobs

[hypnotoad72]

12:37 PM on 10/14/2010

Very true and a great point. Jobs that don't pay enough or are undervalued or devalued won't help our economy. The media and most of the Sunday news shows seem to forget that it's about the working class and their wages. Our economy is simply not supply-side, no matter how the voodoo economists want to pretend it to be.

Plus, I love this link too much to not use it (again): http://motherjones.com/kevin-drum/2010/01/vicious-cycle-stagnant-wages

[Rayme]

09:00 AM on 10/13/2010

All great points, I'm surprised to see this article on a MSM website.