Dr. Housing Bubble — Tectonic shift affects housing market

Buying a home is something embedded in the American economic DNA.  Purchasing a home is the biggest financial decision most households will make in their entire lives.  In the past the act of buying a home was more of a ritualistic rite of passage; you scrimp and save for the down payment, you purchase a home where your family will set roots, and eventually you will aim for that mortgage burning party.  The entire process was accelerated in the last decade to create a perpetual churn.  A mortgage was merely a temporary tool in the non-stop property ladder progression to the top.  The equation did not leave room for falling home prices or a weakened economy.  So we are left with a battle for the soul of US housing.  Do we go back to more tested ways of a boring housing market where banks actually verify financials or do we juice up the machine again?  The only issue is that the market no longer believes in the new way of financing housing and the government now has to step in to soften the withdrawal with loans such as FHA insured products.  Yogi Berra once said it’s tough to make predictions, especially about the future.  But the past is set in granite stone.  What will the future look like for the American housing market?

Read it at Dr. Housing Bubble

The future of the American housing market just became more complicated: The impact of the mortgage settlement and financial tectonic plates shifting.
by drhousingbubble