Its hard enough to afford the simple life E.g. Food, Bills, Car Registration. But with the constant rises in interest rates on home loans it makes it even harder for the average home loan and even harder on someone wanting to get a home loan.
The over riding governance on interest rates is the Federal Reserve System.
However, the sharp increase in real estate values over the past years makes no sense to me.
Your average home was once an affordable expense when it was worth only a hundred thousand dollars.
In this market, we see ridiculously priced homes, everything from studio apartments to small mansions…all priced way above the means of ordinary people who comprise the bulk of the population.
What is taking effect now is that as the people keep losing good paying jobs to downsizing, they in turn move in to cramped living quarters.
This in turn results in a glut of real estate sitting with for sale signs that could stay for sale for a long time.
Unless prices get reduced to where people can actually afford them, the shaky condition of the real estate market could lead to further economic trouble.
The stimulus that the Federal Reserve can provide by lowering interest rates will ease the burden, but never enough to give the general population the needed relief for these astoundingly high real estate costs.
In effect, we have a shaky economy hinging upon what real estate will do. Some prosper by buying and selling, never considering that people’s income should dictate what real estate should sell for.
No slight decrease in interest rates will solve this growing problem.
Only drastic reductions in the costs for real estate can revive the interest in buying real estate again.
Those willing to sell property should consider lowering them to where a greater pool of potential buyers will buy without having future problems as interest rates change.
The greed factor will ultimately turn the American Dream into a nightmare.
Don’t depend on what the government can do…their hands are tied now that they have a run-away national debt and bad fiscal policy.
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