In the largest single monthly drop since 1968, the year such records began to be kept, the U.S. housing market plunged by 27% in July. The nosedive occurred in spite of the fact that mortgage rates are at historic lows.
The news headlines by mainstream media outlets, however, mask the depth of the crisis. Several misleading statements were made by not only the AP and NPR but the National Association of Realtors, leading readers to believe that the July crash is merely the worse in 15 years.
Reading beyond the headlines to the second paragraph or beyond will reveal the actual dire picture. Sales of EXISTING homes are the worst in 15 years. But when sales of NEW homes are added to that figure, NAR admits that July is the worst month since 1968.
ABC News reported this bad news, but one had to get to page 2 of the article in order to find it. ABC's headline did, however, include the words 'the worst since 1968.'
More importantly than the state-run media's continued attempt to paint Obamanomics in a positive light is what all of this means for you, the citizen.
In short, it means that Americans have no confidence in this economy. The housing market has always been a reliable bell-weather as to trends in the financial sector. And, in spite of mortgage rates being the lowest in U.S. history, Americans are not buying. Citizens are hanging on to their money out of uncertainty about the future.
This fact is only confirmed by the trends in investments. As the stock market teeters in response to several months of bad economic news, Americans have been increasingly investing in precious metals, namely, gold and silver. Historically this has been THE tale-tell sign that Americans sense big trouble in the economy. They opt out of stocks and bonds and buy gold and silver instead.
Further, July's housing figures point to big trouble just ahead in the markets. This is not a good time to invest in the stock market.
In addition, it is no longer true that housing is a 'good investment' or a 'means to build wealth,' as consumers have so often been told.
As the fog continues to fade from the smoke-and-mirrors 'boom' of the 1990s and the first 7 years of the 21st century, it is becoming all too clear that the housing boom was an artificially created bubble--a brainchild of the Clinton Administration, which used Fannie Mae and Freddie Mac as a welfare agency, pressuring lenders to grant mortgages to anyone whether they could afford them or not.
Now that the bubble has burst and the mask is off, Americans are waking up to realize that owning a home is not the 'pot of gold' they have been told.
This is not to say that owning a home is not a good idea. It only means that it is not a good way to 'build a nest-egg for the future.' Owning a home is about shelter and not about getting rich. Once Americans accept this fact the housing market will stabilize, but it will never again be viewed as the primary source of building wealth or a 'hedge against inflation.'
As many have been warning for over a year, prudence dictates that citizens prepare themselves by whatever means necessary for the very rocky road ahead.
Be sure to catch my blog at The Liberty Sphere.
Comments
Again....I urge everyone to buy real gold, put it into a safe at home or a safety deposit box at your local bank. If able, put your monies into an established credit union. Buy seeds that produce plants with seeds that reproduce as some (most) seeds produce plants who's seeds are sterile....grow a garden...it will be fun, you'll get exercise, fresh air and sunshine, you'll be eating better by knowing that what you eat has no chemicals in it, and you'll be saving lots of $$$ as compared with today's current grocery prices ! If unable to grow a garden...buy lot of dried goods, rice, beans etc. Buy lots of canned goods, a simple water purifier, a propane camping stove , a hand cranked radio, candles or oil lamps.You might also consider refinancing your home while the rates are low...this will save you money that can be used to buy those seeds and pay for the water needed in your new survival garden and the other items I mentioned. The housing market is not done crashing much like the NYSE and others. The masterminds behind the deliberate world wide crash are not done with us yet....they want more money, power and control ! It's time to get busy while summer is still here
The federals have given themselves the ability to inspect all safety deposit boxes. Nothing you have there is safe if they decide to take it.
Physical gold = absolutely yes. Storage in any financial institution - real bad idea.
Let's face it, the federals have now taken corruption to a whole new level. They simply don't give a damn if you know it or not. Get prepared for what's coming (most likely lawlessness).
I guess we all have an idea who the bogeyman is in all of this dooming and glooming. Some would say that it is government run amok. Some would say that it is capitalism run amok. I think there are strong arguments for both positions. Which position you take depends on who you personally fear the most. Amazing that 90% of us base most of our ideological opinions on who we fear the most. This is truly disturbing. Until we accept that the fear is grounded on both sides of the argument - we can do nothing to fix the problems except "buy gold" and accept that we will be renters for the rest of our lives providing someone else the return on their investment. lg
lg--Help me understand how you characterize this as 'dooming and glooming' when the figures speak for themselves? I don't get it. This is a real crash, and it WILL have serious repercussions.
Sorry - didn't mean to imply no cause for dooming and glooming. That was actually said with no agenda. Agreed - the situation is gloomy and doomy! lg
It makes little difference what mortgage rates are when the lenders refuse to make loans except to those who do not need it.
FICO score requirements are higher, down payment requirements are higher and even a minor blip on your credit reports will keep you from getting a loan.
Even VA/FHA loans are harder to get. Lenders are sitting on piles of cash and refusing to make loans.
Throw in the bubble from the stimulus credit - and it's bursting after April - and this should surprise no one.
I also think that small businesses are having an equally hard time getting loans. It is really kind of a testament to the perverse nature of bankers. The bailout money was supposed to keep lending money out there to keep the economy moving. It was never an attempt to plump the bank's balance sheets. lg
Actually, the facts are that consumers have stopped spending across the board. It is not about loan availability. It is about lack of consumer confidence in this economy and MAJOR uncertaintly about the future of America.
Actually, unemployment is so high that confidence has nothing to with it. If one has no means to invest, investment/purchases simply cannot take place. The real unemployment level right now is around 16% if not higher.
Anthony,
I have tried twice to respond to your last comment but cannot seem to do it without using objectionable words. Since I am a regular commenter, I think you know I don't use objectionable language - but alas Examiner thinks otherwise. - lg
lg--never fear--it is a bug Examiner is still working to fix. Even I have been tagged with the dreaded 'objectionable language' error message when attempting to respond to comments.
Apparently the Examiner's web site has a bug or a virus. This situation will necessitate full federal intervention. Case studies will no doubt be required. Full disclosure of any and all sites, and those who use them will have to be forthcoming, along with any and all Examiner employees involved. Monitoring of all of the Examiner web sites by the necessary federal agencies will be mandated. The federal government will impose new taxes to cover the anticipated cost of such an undertaking. Included in these cost will be the thousands of new federal employees that will be hired and is necessary to complete this task. These new jobs will be permanent and federal retirement benefits will also be mandated. Cost over runs are anticipated.
Phil--LOL!!
Things are quite cheerful and bright! Let's all go out and buy new cars to celebrate and show how our great "Way of Life" is superior to all around the world--so much so that Bush says they all hate us for it! We are great, we are grand, we are the superior people of the planet earth here in the good ole US of A. Why can the world just not accept how great America is with our crime, drug abuse, corruption, sex slavery, overbearing government and incompetence, shrinking savings, increasing debt, declining infrastructure and declining education system, vast private prison system, etc.?
The banks aren't loaning, that is the answer to the big mystery.
And why aren't the banks loaning? You see, this simplistic statement fails to look at the root cause, which is, namely, banks are deathly afraid to--fearing that they will need the money in a coming economic crash, such as we are heading straight into.
The fighting of endless wars: the drug war, Afghanistan, Iraq, etc and sending billions to Israel, plus the shipping of our jobs overseas to India, China, and etc. have all caused this greatest depression. The government is to blame, yet, the government wants the citizens to pay, through higher taxes, for the governments mismanagement. It is time to get a new government. Out with the established politicians and in with new representatives that represent Americans, not Israelis. Our government is Israeli occupied territory.
The USA is screwed and it is all because you voted for a president like you were voting in the Eurovision song and dance contest. People jus voted on the popular base not with their brains.
You say that people voted like it was a song and dance contest - I am in the UK and totally agree. However who is there to vote for when so many are corrupt? Especially when the more sincere and genuine politians aren't allowed to join in the stage show. It seems politics today is all the same - lying puppets set up for for ulterior aims.
Obama is such a pathetic political figure he should just resign - http://www.obama-resign.com/
The premise of this article is incorrect. Lots of people DO want buy homes, especially with the low prices and interest rates, but the banks don't lend the $, pretending they must B more 'careful'. U know, because after receiving a zillion ga-villion dollars in freebies they just can't afford 2 lend N E of it ROFL!! Fact is they R TRYING 2 use that freebie $ 2 buy up the world, but nobody will accept their fake non-existent BS 'grant' $. It has been quarantined by the Earth.
Clarification: 4 those who don't get it; the fake BS 'grants' R not accepeted by other banks & owners, because they know the grant $ is not backed by N E thing, etc. = worthless. They know if they, the receiving bank, accept the junk non-$ from the 'lending' bank, they R really getting absolutely nohting but air. That is Y the banks won't lend the $ - because they, as thieves, know just how worthless that non-$ grant BS is. They would B happy 2 sell U something using real currency, like from a bank in some other country with actual value behind it =)
make friends with and if possible join or form a neighborhood militia develop a relationship with the local national gaurd and work to develop a relationship with them to act as an extension in order to work effectively to curtail any lawlessness and be in the loop on all discussions for preparedness and emergency efforts planning so as to be closer to the top of the information pyramid. if a civil war breaks out the ones taken dow first will be those with guns and so you need to make it tougher for them by making the faces people they know. The military won't attack civilians organized to protect themself from lawless mobs but you never know what some wack job will do when given power and told by the corrupt powers that be to start going after civilians and rounding us up as a pre-emptive strike to protect their ability to rule over the masses after the crapstorm starts and we loose all fatih in the government and consequently organize and look to rise up and take back what is being stolen from us. Guns in civilian hands are the only way to keep them from pulling such stunts and letting the local military know that we expect them to have our back is a good thing to do as well. We are all family and getting screwed over by the federal government means we go down to the state level and urge them to strike back from that level of authority to remove all federal power from washington and reform the government under a return to consitutional rule eliminating all federal regulations and restructuring our financial system with real money printed by our country and not a foreign owned group of thieves known as the banksters. Then we declare war on them and put out rewards for the heads of all the corrupt bankers meaning dead or alive. They are more responsible for this than the politicians IMHO.
Attempts at assigning blame to one or another 'side' of the political spectrum is ultimately nearsighted and sorta dumb, to boot. What we are seeing is the death throes of Capitalism, which has been wrung of its last drop of usefulness, even as tax credits and abatements and all sorts of incentives dry up. What we are seeing is the ruling elite calling 'do-overs', to roll back the gains of the middle class to poverty levels so we can all start a-workin' hard all over again in hopes of 'making it'. Precious metals and stocking up sounds....sorta cuckoo....but it ultimately is not, really.
Can't eat gold or silver. If things got real bad the only metal I would barter any of my food for would be lead.
Is George the bitch Bush in jail yet?
America is doomed.
This author said nothing during the run up the housing bubble. Yet calls it a brainchild of the Clinton administration. Then he goes on to blame obamanomics, when in truth all Obama has done, with the help of Bush before he left office, is postpone the inevitable. In truth Ponzi schemes are as American as apple pie. Housing bubbles were not really solely due to Clinton telling the FHA do give more loans. They were due to the belief that you make a house affordable by taking a 50 year mortgage. Everyone forgot you could just build more houses and get the price to drop. This would have been unacceptable for obvious reasons, that most guys who own a house and think of it as a piggy bank would be happy to explain to you. The bottom line is this will continue until people realize houses are to live in.
A Goverment For THE PEOPLE....By THE PEOPLE Now Means....For WALSTREET..For The BANKERS...For The WASHINGTON HACKS!!!!! WE The PEOPLE....No Longer MATTER!!!
We Did Our Jobs Years Ago!!! They Don't Need Us Anymore!!!
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