> > No, in the past rents were too close to the cost of buying a house, > > now it is more expensive to buy a house than to rent, and this is a > > normal market correction. Normal. > > Huh? It is normal, the market is in equillibrium, when rents = > mortgage payments (after tax, after homeowner costs). The fact that > rents are at or below 50% of mortgage payments in many areas indicates > that the housing market is seriously out of what and a correction>>
No it doesn't. It has always been the case that it is cheaper to rent than to buy. If someone gets a bit better job and perhaps works a bit harder, they may say to themselves it is worth it, so that I can buy my own place and they will go ahead and do it. A lot of people rent because they want quality time and not be workaholics and they are happy that way. Others want to work a bit harder or focus on increasing income, and then buy a house. This is the way it has always been. > > > > 2) An extraordinary > > > jump in the rate of housing construction; >>> > > > > Only in parts of the country, where there has been an increase in > > jobs. Normal. > > > The construction increases have been in areas where housing prices > have risen sharply. Contributing to a potential emerging over- supply > situation -- that will put downward pressure on prices.>>> No because in those areas you speak of there has been a constant rise in population over the last few decades. The trend will continue in those areas, although parts of the midwest are depopulating. > > > > > << 3) A sharp decline in > > > the savings rate, driven by a housing wealth effect.>>> > > > > This means people have been drawing heavily on home equity loans > supported by increased paper profits in the recent rises equity in > their homes. This means people are spending more, as a % of income, > thus savings rates are declining -- a bad thing for future interest > rates and productivity.>>>> So they are not as rich as the roaring 90's , big deal. They are better off buying than renting. Until I bought my house, I was pouring at least $100,000 every 10 years down the drain ! And I was not in a high cost rental for the area (I was lucky , I had a nice place for a bit less than was usual) Let me repeat: $100,000 minimum (not including for inflation which would increase that figure) EVERY 10 YEARS. > > > This means people have less savings than they had when they were > > renting and were pouring $10 to 20,000 a year down the drain in > > rent. > > People either rent property or rent money to buy property. We are all > renters. >>> I know, ultimately, the Chinese OWN my house. I don't care. > > In initial years of a mortgage, only about 15% of mortgage payments go > towards equity -- the rest is interest. > > The primary driver of equity build up for buyers is home appreciation > -- which all the fundamentals in the market point to leveling off or > declining. > > If one can rent the same property for 1500/mo, rather than buy it with > a mortgage of 3000/month, the renter is saving $1500 / month. >>> No they are pouring $180,000 every 10 years down the drain. Burning it. OffWorld ------------------------ Yahoo! Groups Sponsor --------------------~--> Get fast access to your favorite Yahoo! Groups. Make Yahoo! your home page http://us.click.yahoo.com/dpRU5A/wUILAA/yQLSAA/JjtolB/TM --------------------------------------------------------------------~-> To subscribe, send a message to: [EMAIL PROTECTED] Or go to: http://groups.yahoo.com/group/FairfieldLife/ and click 'Join This Group!' Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/FairfieldLife/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
