The housing industry prices are still far from fundamentals. House prices are still far beyond any known relationship to rents or salaries in recorded history. It is amazing to see the amount of rent these days, which is equivalent to almost 3% of the yearly purchase prices. With mortgage rates are at 6%, it costs almost twice as much to borrow money from the bank than to simply pay rent. If you were to add up the total amount you pay, in the form of monthly mortgage, insurance and maintenance, it will amount to almost 9%. Rent and salaries are far from reality and anyone who buys today will suffer losses immediately and for the next 5-7 years.

Many house buyers borrowed too much that they can no longer pay the interest, which is the main reason for mass foreclosures nationwide, and some unscrupulous senators are even talking about taking your hard-earned money to pay for your neighbor’s mansion.

Banks have no problem loaning whatever amount the borrower asks for, as long as they can repay the loan. By reselling the loan they put all the risk onto Fannie Mae which are tax payers or onto mortgage backed security buyers. If you’re not aware of it, then it’s very clear that there will be a loan amounting to almost $ 1 trillion that will go unpaid. Now that this trillion dollar debt will not be paid Fannie Mae is under pressure not to buy high risk loans and many investors don’t even want to touch a mortgage backed securities.

For lending standards to return to their traditional standings, this means a return of prices to their own traditional standings.

In today’s market, there is a shortage of first-time buyers of homes, and the high prices of these houses have been no help, especially those new families with children. It is impossible for new families to buy a home at their current prices, and our government has yet to discuss the benefits of lowering house prices in order to help our economy. Their main goal is to keep everyone in debt constantly so that bankers can earn interest on everyone.

Retiring for the baby boomers is going to be very difficult. There where 77 million Americans born between 1946 to 1964, and a third of them virtually have no retirement savings. The only money they have is in their equity, and even the existence of that is in question. People must sell their homes to be able to access their equity, the only trouble here is that the price has already become outrageous that no one can afford to buy them.

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