2010 was 2nd worse year for home construction

2010 ends as 2nd worst year for home construction - Yahoo! News

2010 was the 2nd worst year for new home construction followed by 2009 which was the worst in 50 years! This is not good news since new home construction is such a large indicator of the economy.

 

I doubt if it will get much better in the near future

 

Is it really any surprise with news like this...

The Eight States Running Out Of Homebuyers

The single biggest problem in the U.S. real estate market is simple: There are very few homebuyers.

That seems obvious, but the “buyers’ strike” has caused house prices to drop, along with an epidemic of foreclosures. What’s worse, the long depression in real estate is probably not over. S&P has forecast that home prices will drop by 7% to 10% this year. The S&P Case-Shiller Index has dropped for most of the 20 largest real estate markets over the last several months. RealtyTrac recently reported that more than one million homes were foreclosed upon in 2010.

Many economists argue that the housing market may take four or five years to recover. Even if that’s proven to be true, the all-time highs of 2006 may never be reached again.



Read more: The Eight States Running Out Of Homebuyers - 24/7 Wall St. The Eight States Running Out Of Homebuyers - 24/7 Wall St.

 

I did my part. I bought a used one in 2009. Got it for 2 goats and a half bushel of corn. Pretty close anyway.

 

I feel that the economy is slowly starting to do better. I have actually seen quite a few houses being built around here.

 

How many are selling Angie? you have a glut of repos on the market, house prices falling and people not buying There is still a market though for rented accomodation

 

There are condos in this town selling for less than half price.

 

My rental condo is worth roughly 1/3 of what we paid. Thankfully, I have a stable tenant who pays the payment........

My home has dropped about 40% of it's high, again, thankfully I did not take an equity loan, it is still worth what we paid for it

 

I am just glad that I went with a 15 year loan 12 years ago. I had plenty of equity by the time home prices dropped. Imagine having a 30 year loan and being upside-down in this economy. It is easy to see why so many people are in deep financial do-do right now.

 

Agreed! A lot of people overextended themselves. Did you know that the seeds of the meltdown were planted in 1995:

Bill Clinton Helped Cause The Housing Crisis. | Gather

 

Where was the oversight, where was the regulation? It either didn't exist or wasn't enforced. I can't blame ordinary people for wanting to get into the housing market as much as I blame the people responsible for weeding out those that shouldn't have qualified in the first place and didn't. Lack of regulation, greed by both the banking industry and ordinary people caused this problem. The solution which the Democrats are in favor of and the Republicans are against is tighter regulation. We can't prevent what has already happened but we can prevent it from happening again.

 

I'll go with "didn't exist" under Clinton's regulatory rules.

I don't blame anyone for wanting a house. But, the regulations didn't advocate "weeding out" or "shouldn't have qualified". Once the regulations were in place, it was like the Wild West. Anything goes.

Tighter regulation? The democrats' track record proves otherwise. A democrat's (Clinton's) looser regulation contributed to the mess we're in now!

 

Point a finger if it makes you happy.

 

When companies are allowed to give morgages that are 5 or 6 times wages then you have problems and this happend

 

Precisely! And the key words in your sentence are "are allowed". The 1995 regulations allowed the government (Fannie Mae & Freddie Mac) to give mortgages to people who couldn't afford them. Well, it finally caught up to us in 2007/2008 and look what happened! Disaster!!

 

There is an example from recent history that points the finger squarely are the Right and their deregulation mantra:

Savings and loan crisis in which 747 institutions failed and had to be rescued with $160 billion of taxpayer monies. Reagan's "elimination of loopholes" in the tax code included the elimination of the "passive loss" provisions that subsidized rental housing. Because this was removed retroactively, it bankrupted many real estate developments which used this tax break as a premise, which in turn bankrupted 747 Savings and Loans, many of whom were operating, more or less, as banks, thus requiring the FDIC to cover their debts and losses with tax payer money. This with some other "deregulation" policies, ultimately led to the largest political and financial scandal in U.S. history to that date. The Savings and Loan crisis. The ultimate cost of the crisis is estimated to have totaled around USD $150 billion, about $125 billion of which was directly subsidized by the U.S. government, which further increased the large budget deficits of the early 1990s.

 

Who controlled Congress in 1980? Who was President in 1980?



The United States Congress granted all thrifts in 1980, including savings and loan associations, the power to make consumer and commercial loans and to issue transaction accounts. Designed to help the thrift industry retain its deposit base and to improve its profitability, the Depository Institutions Deregulation and Monetary Control Act (DIDMCA) of 1980 allowed thrifts to make consumer loans up to 20 percent of their assets, issue credit cards, accept negotiable order of withdrawal (NOW) accounts from individuals and nonprofit organizations, and invest up to 20 percent of their assets in commercial real estate loans.
The damage to S&L operations led Congress to act, passing the Economic Recovery Tax Act of 1981 (ERTA) in August 1981 and initiating the regulatory changes by the Federal Home Loan Bank Board allowing S&Ls to sell their mortgage loans and use the cash generated to seek better returns soon after enactment;[7] the losses created by the sales were to be amortized over the life of the loan, and any losses could also be offset against taxes paid over the preceding 10 years.

 

I'll go you one better. The Clinton admin policies actually "required" lenders to make loans to people who couldn't afford them. They did this by regulating the lenders to make loans without doing the proper verifications such as proof of income. I was a relative newbie to the banking biz in the early '90's but I do remember the concern these new regulations caused. Clinton started the ball rolling then once these people started facing foreclosures novel ways had to be created to keep them from losing their homes....viola, interest-only, ballons, etc. The bubble burst we saw was a direct result of the govn't telling the banks how to make mortgage loans.
....and for dr moen, Reagan exposed and closed those loopholes & the false money they created (early versions of "cooked books"). That is what caused the S&L debacle.

 

Yeah they were allowed to so that excuses them completely. You know..I don't remember Clinton being around for S & L failure 1. Think the culprits were somebody name George the first and if I recall correctly, somebody named McCain. But you're right, they were allowed to do it so, hey, no big deal I guess.