Shrink the State. End the Fed. Balance the budget. Make a profit. Leave an inheritance.
Gary North
Last November, people with good credit could get a 3-year mortgage for 3.3%. Today, it’s 3.8%. The rate is likely to keep rising. Some estimates predict that it will be 5% at the end of 2014. Every month, the Federal Reserve buys $40 billion worth of mortgage bonds from Fannie Mae and Freddy Mac, the [...]
Continue reading →Housing policy in the United States has copied the fascist model for housing ever since 1934, when the FSLIC was set up: government-guaranteed savings and loans. This was part of the well-named National Housing Act. It subsidized middle-class housing by guaranteeing Federal Savings and Loans against “bank runs.” The essence of economic fascism is simple: [...]
Continue reading →Mortgage rates have risen from 3.5% to 3.8% in the last week. The Federal Reserve System buys $40 billion in mortgage bonds every month. This greatly adds to demand, keeping mortgage interest rates low. That’s the theory, anyway. But the theory is facing headwinds: rising rates. This was not supposed to happen, but it is [...]
Continue reading →Anything below 50 is a recession indicator. The optimism index rose to 44 in May, up from 41 in April. The last time it was above 50 was in April 2006. It bottomed at 8 in January 2009. “I’ve been down so long, it looks like up to me.”
Continue reading →In Dayton, Ohio, there are 7,000 abandoned buildings. Because of federal asbestos controls, it costs $11,000 to demolish one building. So, they rot. The city is desperate. It cannot afford to demolish them. So, like a blight, the number of these buildings continues to grow. This is the Keynesian economy at work. This is recovery. [...]
Continue reading →Anything below a figure of 50 is considered recession level. In March, it was 44. In April, it was 42. Economists had expected an increase to 45. Too many buyers cannot get credit, despite low mortgage rates. The low rates are a benefit only if a borrower can qualify for the loan. Home builders say [...]
Continue reading →The FHA is almost out of money, so the federal government is going to tax or borrow almost a billion dollars, so that the subsidies can continue. You wouldn’t want a free market in housing would you? You would not want supply and demand to set the price of homes, would you? Of course not. [...]
Continue reading →California’s housing prices have rebounded over the last year. Why? Barry Ritholz, an astute observer, lists the artificial conditions that have caused this. The Federal Reserve system has prompted an enormous amount of money in order to purchase Fannie Mae and Freddie Mac bonds. This initially had the effect of lowering mortgage rates, but in [...]
Continue reading →With the Federal Reserve System buying half a trillion dollars worth of Fannie Mae and Freddy Mac IOUs a year, the mortgage market is flooded with newly created money. Lenders are now offering 3% down payment mortgages. Why, it’s 2006, back from the grave. This has breathed new life into the housing market. This does [...]
Continue reading →It is now over five years since the recession began. We are told that the housing recovery is strong. Then why is the best-performing new home building stock losing money? KB Homes lost $12 ½ million from December through February of this year. This was down from a loss of $46 million during the same [...]
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