Sometimes, the only way to win at a game is to not play. Active participants in today's housing market game will live to regret their actions.
Read about housing starts at Zero Hedge here.
Potential sellers find themselves shackled with the "golden handcuffs" of a 3% mortgage that will be replaced with a mortgage at 7% if they sell and move.
The pool of potential buyers will dry up as the summer buying season ends and the industry will be scraping the bottom of the barrel to come up with buyers. The only sellers who will win right now are those who purchased their homes a long time ago and who have no debt or very little debt.
Buyers will be the patsies. Best quote/comment from the Zero Hedge article comes from someone who says they are a mortgage underwriter:
"I'm a mortgage underwriter. Its just the opposite. Guidelines are easing up to get lesser qualified borrowers in the door sadly. The FHA, VA and USDA loans are basically subprime at this point. With down payment assistance programs, people with no money down can buy a house with so so credit or basically no credit as long as they meet a certain credit score."
Sound familiar? Speaking of subprime home buyers, Angelo Mozilo (founder of Countrywide Mortgage) passed away this week.
The "Original Orange Man" - Godspeed Angelo
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