Bob N

The Case for Higher Interest Rates and Lower Home Prices

Perhaps I misunderstand the writer, but he seems to imply that no one in the whole world could possibly have 60K to put down on a $300K house. That kind of highly leveraged mindset has sunk many people, and almost the entire country as a result.


On Dec 25 11:57 AM Rob Viglione wrote:

> @Bob N, why the harsh words? No need for that kind of negativity.
> This article makes perfect sense. You don't have to be a real estate
> "expert" to understand that prices have meaning and markets have
> natural mechanisms for rewarding the prudent and levying consequences
> upon the imprudent.
>
> Prices have to fall as a natural cleansing process. Those who cannot
> afford property should not have been encouraged to buy in the first
> place. Reality always has a way of catching up. Playing God with
> interest rates only encourages further malinvestment; unfortunately,
> we're at a precipice where more dislocation from stability could
> mean disaster.
>
> I'd rather suffer asset price decline now instead of total financial
> system collapse later, with our currency rendered worthless and our
> government unable to meet debt service requirements.

The Case for Higher Interest Rates and Lower Home Prices

Scott must live in a bubble area and been living beyond his means for a while. I live in the Midwest, and 20% down mortgages have been the 'norm' here for a long time. People actually have to plan and save to afford the down payment, a concept that was in the bubble areas of California, Nevada, Arizona and Florida. And yes, people pony up 20% when they bought their 300K, 500K, or 750K homes. If the home 'owners' in those areas actually bought homes that they could afford, the entire US economy would not be in the terrible position we are now in.

If you don't have 60K to your name to put down on your house, how can you actually claim to be a real estate expert? 'Experts' like yourself have help create our problems and should be ashamed to publish such drivel.