Upside Down Mortgage

Housing Bubble Financial Crisis

Question: Financial uncertainty in housing market, is now a good time to buy a house?

With all the news about Wall Street financial instituions crashing and burning needing government bailouts to survive, I have to ask a question about the fundamental problem...the housing bubble burst.

Home ownership purchases are the cornerstone to the US economy correct? When times are good, housing demand goes up, prices typically increase. When times are bad, demand drops, prices decline. We are obviously in the latter time.

Since this finaincial crisis began, prices are declining, so is this a good time time to buy or build a new home assuming the buyer has a stable source of income and/or financing?

Since it seems Wall street finds home investment so troubling, are banks determined not to finance home mortgages anymore? When did home mortgages become a bad thing? Is it safer to wait out the crisis by not shopping and buying homes right now or not? Both on a macro and micro level!

What does Wall Street want the average home buyer to do?

Answer: You don't have to wait for Wall Street to give you a clue on when to buy a house. If you need a house, you need a house period. If you are you looking to buy a house that you will live for the rest of your life then anytime is a good time to buy a house because the value of the house will not be a concern of yours.

If you are looking for a house as an investment then housing pricing will continue to decline for a while maybe a year or more so I would say now is not the BEST time to buy but you will still make money on it depending on how long you own it.

It's difficult to get a loan right now not impossible but difficult and where you probably needed no money down or very little now you will need at least the 3% or closer to the traditional 20% down.

The mortgage became a bad thing when risky loans were made, and people took insurance that these risky loans would not be paid. When they weren't paid those that took the insurance out could collect on their policies (credit default swap).

Wall Street wants people to start buying again because this will shrink the supply of houses available, it will stabilize prices and builders can start building new houses again. Buyers are scared to buy because they fear the value droping and banks are scared to lend beause they fear they will not be paid back and/or the collateral (house) of the loan will not be worth the loan amount.

Ron Paul on "Morning Joe": Keynesian Economics, Financial Crisis, End The Fed

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