The homebuyer tax credit definitely boosted home buying and created a drop-off after it expired....


The homebuyer tax credit definitely boosted home buying and created a drop-off after it expired. But that doesn't fully explain the terrible housing market, Diana Olick writes, since many homes are still expensive enough that buyers aren't swayed by an $8K tax credit. Mostly, it's a "startling lack of confidence" that poses a grave risk to recovery.
Comments (23)
  • Papaswamp
    , contributor
    Comments (2241) | Send Message
     
    The home doesn't make a very good ATM anymore...the fun is gone.
    19 Aug 2010, 06:20 PM Reply Like
  • Jeff Nielson
    , contributor
    Comments (2449) | Send Message
     
    Yet another CNBC shill who is "surprised" by developments in the U.S. housing market.

     

    For how many YEARS can these clowns continue to be "surprised" by everything that is happening in the U.S. economy - before being fired for being far more clueless than the audience they are supposedly "informing"?

     

    Since these "analysts" are so "lost" with respect to fundamentals that even a trail of bread-crumbs wouldn't help them, let me give them a hint with just two words "MASSIVE FRAUD".

     

    "U.S. Housing Market Even More Fraudulent Today"
    www.bullionbullscanada...

     

    "U.S. “Home Equity” Loans Revealing"
    www.bullionbullscanada...
    19 Aug 2010, 06:36 PM Reply Like
  • NC Trader
    , contributor
    Comments (40) | Send Message
     
    I always get the feeling Diana Olick sees reality but has to temper her reporting to tow the company line. The fact that she even refers to the tax credit as a demand-pull stimulus is pretty bold considering the cheerleading rubes she works with.
    19 Aug 2010, 06:47 PM Reply Like
  • Jeff Nielson
    , contributor
    Comments (2449) | Send Message
     
    That's certainly a valid comment. I've seen a number of people appear on the propaganda-outlets who clearly "know more than they are saying."

     

    However there are only two possibilities here. If these people are being muzzled/censored by the propaganda-outlets, then they (as JOURNALISTS) have to decide whether their integrity or their paycheque is most important to them.

     

    For those who are engaging in self-censorship, merely to be more attractive to the propaganda-outlets, then there is obviously no excuse for their conduct.
    19 Aug 2010, 07:15 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3527) | Send Message
     
    Paychecks are very important to most people. A person can make many rationalizations for their behavior before they can finally admit that they've been corrupted.
    19 Aug 2010, 07:18 PM Reply Like
  • MarketGuy
    , contributor
    Comments (3983) | Send Message
     
    As far as CNBC and "curbing one's tempermant/knowledge", the finest example was Dylan Ratigan, who DID speak his mind when at CNBC. Well, he's gone and now has his own show which is a perfect "flip the bird" to CNBC.

     

    Now Dylan pumps out great stuff like this: www.youtube.com/watch?...
    19 Aug 2010, 09:41 PM Reply Like
  • davesnothere
    , contributor
    Comments (487) | Send Message
     
    Trick to being a pro financial shill is to stay vague, stay positive and if you're wrong, its because new data changed your mind.
    19 Aug 2010, 11:55 PM Reply Like
  • Duude
    , contributor
    Comments (3410) | Send Message
     
    IMO, Ratigan had only part of it right. His problem is he still has a mindset that all homeowners are victims, (patsies). There were plenty of jobless Americans that 'qualified' for liar loans and even more that didn't worry about their adjustable rate loan because real estate only goes up and so they'd just flip the property by the time their mortgage was adjusted. Many more too are well aware that a non-recourse loan means ultimately you could just walk away if things go wrong. The system itself designed and supported by Congress was embedded with moral hazard for banks, loan originators, the GSE's, homeowners, and politicians own campaigns.
    20 Aug 2010, 04:40 PM Reply Like
  • TraderMark
    , contributor
    Comments (2421) | Send Message
     
    My humble belief is the market for home owners who can bring even 3.5% down is mind numbingly low. Many states allowed the tax 'credit' to be bastardized and used as the down payment. Also many buyers now ask for seller financing from desperate sellers - i.e. have the sellers pay for closing.

     

    We have an abstract lack of savings. All those with savings are already home owners. To create the marginal buyer we have to bribe them with handouts to cover their down payment. This is very obvious because 4.4% mortgage rates should be creating a tsunami of demand. If you went to 0% down, you'd see it. I should have not said that out loud - FannieFredron is probably listening.
    19 Aug 2010, 06:56 PM Reply Like
  • davesnothere
    , contributor
    Comments (487) | Send Message
     
    20 pc down should be expected. These liar loans with nothing down is what caused this mess, and drove up prices.

     

    It'll be another 20 years before people forget that housing can crash and go down in value.
    19 Aug 2010, 11:57 PM Reply Like
  • Credible Clarity
    , contributor
    Comments (160) | Send Message
     
    Just wait until the mortgage tax deduction is taken away. It'll be a couple of years, but how the heck else will Fed and State debts start to be paid down. Oh yeah. Buy a house because you want to live there for a long time - and over a long time, it probably beats renting. But make no mistake. After you pay property taxes, bond taxes, parcel taxes, mortgage interest and principal, maintenance, upgrades (desired or mandated), it isn't actually a bargain unless you have massive appreciation of price. Just sayin . . . there has been a lot of overreaching by home builders for profit and politicians shilling the "American dream" of home ownership.
    20 Aug 2010, 12:13 AM Reply Like
  • TraderMark
    , contributor
    Comments (2421) | Send Message
     
    we can't do 20% down anymore since it would drop home prices another 20-30% within a year.

     

    there would be no one to buy. Every public policy is about trying to inflate home prices because due to lack of income growth, Cramericas need asset growth. Since it is not coming from the stock market the past decade, it was the housing market. Without the house ATM many Cramericans are toast so we can forget 20% down. 3.5% FHA loans for everyone with a pulse. That's current policy and I dont see it changing.

     

    The "socialists" in France and Germany require 20% down - never had a bubble or crash. But what do they know about financial innovation?
    20 Aug 2010, 08:53 AM Reply Like
  • GotLife
    , contributor
    Comments (1376) | Send Message
     
    The housing bubble was more like an option play. Buyers were using their 0-3.5% down to secure an option on an asset that was rapidly inflating in value. Put $7K down on a $200K asset, watch it inflate to 300K and your net wealth increased from $7K to $100K in a matter of a few short years. Everybody was rich because we all "knew" that housing has never declined in value (except in deflation which just never occurred anymore since the Fed and country are committed to mild inflation.)

     

    Without asset inflation, the housing play becomes a rent versus buy decision. Down payments get eaten by resale commissions or deflation or both. Even the financially uninformed can do the math. Therefore, no more options. Game over until we can get the inflation game roaring back! That's why the Fed and Treasury are trying so hard to fuel inflation. The only question is not if but when and by what percent?
    20 Aug 2010, 09:26 AM Reply Like
  • Poor Texan
    , contributor
    Comments (3527) | Send Message
     
    "Mostly, it's a "startling lack of confidence" that poses a grave risk to recovery."

     

    Confidence comes from good leadership. Anyone who has been in the military or large corporations can attest to that.
    19 Aug 2010, 07:14 PM Reply Like
  • TeresaE
    , contributor
    Comments (3041) | Send Message
     
    Speed of the team, is speed of the leader.

     

    This is as true in a 500 person town, as a 5 person mom & pop, or the major outfits.

     

    And yes, even a country.
    19 Aug 2010, 11:35 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3360) | Send Message
     
    Prop up House prices by artificial means and market manipulation.
    Meanwhile local government's have "affordable" housing programs.

     

    Which is it? Are houses too cheap or too expensive?

     

    Lock out the younger generation from the American Dream by keeping house prices elevated for one reason,

     

    To protect Bank's balance sheets.

     

    All these policymakers make me sick.
    19 Aug 2010, 07:44 PM Reply Like
  • D. McHattie
    , contributor
    Comments (1844) | Send Message
     
    To attribute falling home sales and prices to 'lack of confidence' creates the impression that this is merely an emotional problem. As though buyers are just emotionally weak and there is otherwise nothing wrong with the average price/income ratios of homes.

     

    It's like giving fear as the reason everyone doesn't jump off a bridge or go jogging on the freeway.
    19 Aug 2010, 08:28 PM Reply Like
  • Steve Soden
    , contributor
    Comments (769) | Send Message
     
    Diana is hot and that's why she's on TV!

     

    Look, people are tapped out!
    Those that can invest are waiting for the knife to stop falling as they see it.
    In markets that I'm shopping for a home many Bank Owned Properties last a couple of days on the market.
    I see things going as The Government and their Banks.

     

    Diana you keep saying what your Procucers tell you and we'll be in a Depression soon. Keep up the Good Work, Not!!!!!!!

     

    PS But, you will be able to keep your job.
    19 Aug 2010, 08:32 PM Reply Like
  • nasdaq99
    , contributor
    Comments (114) | Send Message
     
    you guys need to be thinking about the overcompensated union dicks that are gaining control over the state & local govt. WE need to have $2,000,000 going into retirement in order to equal their total take with ever escalating pension and med benefits.

     

    say NOOOOOO to more state bailouts or we're going off the cliff at teh state & local level, not to mention the drag on national budget.
    19 Aug 2010, 08:42 PM Reply Like
  • apberusdisvet
    , contributor
    Comments (3096) | Send Message
     
    It's a really different world when you actually have to produce proof of income such as tax returns, provide credit and character references, and prove a stable earnings history. I was even advised once to have only 2 credit cards. Those were the hoops that I, and many others had to jump through to get a loan. When the government got in the process, the banks didn't give a sh*t. A sad lesson which many will never fully learn, unfortunately.
    19 Aug 2010, 09:11 PM Reply Like
  • Broxburnboy
    , contributor
    Comments (108) | Send Message
     
    How about lack of money? or lack of credit even at these ridiculously low "teaser" rates.
    How about no lack of empty homes whose owners are desperately trying to unload at any price?
    How about the certainty of property tax increases to pay for diminishing services by insolvent municipalities.

     

    Confidence my A**
    19 Aug 2010, 10:28 PM Reply Like
  • TeresaE
    , contributor
    Comments (3041) | Send Message
     
    Isn't this the exact same argument they used concerning the drop in consumer sales?

     

    Next up, confidence is the reason employers aren't hiring - not their lack of sales or regulatory bs, it's "confidence."

     

    Really easy for tools to talk the script when their own paychecks are good and raises just keep on coming.
    19 Aug 2010, 11:53 PM Reply Like
  • Duude
    , contributor
    Comments (3410) | Send Message
     
    The double dip in the housing market is transparent proof that the 8K credit was entirely a waste of tax payer money. Ultimately, the housing market is going to go where it has to go no matter what short term measures you apply to slow the descent. Frankly, we need to see it bottom out but average home prices are still way high especially in California.
    20 Aug 2010, 09:00 AM Reply Like
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