"The housing recovery seems to
have been a temporary affair. Preliminary data frames March as weak as last
October. It looks like lower interest rates boasted sales. Those rates are up
from 4.72% to 5.02%.
Worse yet, Operation Twist is over. That is where
the Fed sold the short end of the bond market and bought notes and bonds of 5,
7, 10 and 30 years. Even though the BIS, The Bank for International Settlements,
said the program was a resounding success, it was not. American friends knew the
Fed was a buyer, so they proceeded in selling long dated paper destroying what
the Fed policy was trying to accomplish. Now we expect QE 3, which we have
expected for sometime. Lest we not forget the slight easing of credit and the
government’s FHA low down payment programs.
A large
negative we did not face several months ago was higher gasoline prices,
which the public believes are going to stay at current levels for the next few
years.
If a new house is purchased it has to be close to work
and that often is not an easy task.
Making plans more difficult is that
only half of the homes being sold will be lived in by the owners - the
rest are owned by speculators, who for the past 5 years have been
eminently unsuccessful in picking a bottom in the housing market.
We
wonder if these buyers are aware that the administration, which we reported on a
few weeks ago, have proposed to have Fannie Mae and Freddie Mac dump 560,000
under water defaulted properties on the hedge funds and others in blocks of $1
billion or more to be eventually rented and put into REITS. Buyers also have to
contend with builders building 513,000 new homes a year when 6.8 million homes
are already on sale.
Now that banks have cleaned up most of the defaults
at the low end of the market they’ll now concentrate on the smaller middle
sector and the top of the market. This lender policy will add many more homes to
defaulted inventory and could take that number to 9.8 million defaulted homes
for sale. Those looking for a let up will have to wait beyond 2014. That means
you should continue to rent over that timeframe. That means depending on type
and area, homes over that period should fall another 10% to 20%. What is
disconcerting is the perpetual buying by lenders (banks), Wall Street,
government statistics, the National Association of homebuilders and the National
Association of Realtors - all produce bogus figures to trick the public into
buying. There is also a shrinking number of people eligible to be buyers. These
facts at our disposal tell us that there is no housing recovery in progress and
that the economy needs QE 3 ASAP. The Fed is trapped and has to print more money
just to keep the game going sideways. That, of course, pushes inflation higher,
which pushes gold and silver higher.
You have
to ask yourself how can there possibility be a recovery?
The
stock market may be approaching old highs due to the Fed manipulating money, but
there is no recovery on Main Street, nor will there be..."
at http://www.globalresearch.ca/index.php?context=va&aid=30060
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