HangingOnByAThread

Dangerous Optimism in Homebuilders

People losing their homes is never a good thing, regardless of whether it's due to job loss or to loans that should not have been issued in the first place. That said, however, home prices have skyrocketed over the last 8 - 10 yrs, while real wages have been flat. Home prices must be brought more in line with real wages. I keep hearing politicians talk about transferring the wealth of oil companies back to the public (which really means back to government), yet we're bailing out investment backs and providing tax breaks to builders, the entities responsible for the run up. Funny thing is, if the investment banks hadn't been so greedy to begin with, homes would be more affordable, and higher food and gas prices (more in line with the rest of the world) wouldn't really be a problem. So lets bail out the investment banks and builders, and put the burden for their greed on the backs of the public, and scream how unfair it is that oil companies are reaping profits due to the governments devaluing of the US dollar to bail them out. How about letting the free market economy work.

Homebuilders Hands in Congress' Pocket?

The government has now put itself in a position to have to prop up home prices due to the risky assets now on its books. It will undoubtedly let the air out slowly. While this has a positive temporary effect for the economy, it also means that home buyers will not get affordable (and realistic) home prices anytime soon. And in fact will be purchasing a declining asset. Buyer beware if you were considering your new purchase an investment. And now it appears the price gougers (Home builders) will bet even more benefit. So much for a free market economy.