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One-Two Punch To Housing

19 May 2010 4 Comments

Good thing Jim Cramer called the bottom in housing a year ago.   The latest economic data for housing is out and it’s not pretty.

First, mortgage applications have dropped to a 13-year low.  This is the pure result of the tax credit ending.  Tax credits and incentives do not create demand, they move demand.  In this case, the tax credit moved demand forward which creates a void when the incentive ends, thus a 13 year low in mortgage applications.

Second, delinquincies and foreclosures are still rising.  I think we’re now into the game where people are voluntarily walking away.  The whole strategic default thing.  More on this in the article tomorrow Friday.

Deflation is alive and well in the land of housing.


  • JFR said:

    Hi There,

    I'm 26 years old, I been out of college for 3 years now. I worked in the IT field for almost 3 years, and now i have decided to launch my own company (which is not doing so well 🙂 ). In the 3 years that I worked I was able to set aside a good amount of money.

    I'm currently trying to invest some money, but need some advice. Stocks ? Silver Coins ? Real Estate ? The last one is one of my main targets for 2010. I'm trying to buy property in south Florida (FT.Lauderdale area) is this a good move at this time ? Should I wait ?

    Any comments or advice are greatly appreciated

  • 20smoney said:

    Funny you should ask… here's a hint… friday's article is called "Patience is a Virtue" and housing is addressed… check it out on friday.