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(The Year 2012 In Review)
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|User Info||"They Should Have Seen It Coming"; entered at 2011-12-05 09:32:22|
Registered: 2008-12-21 CA
The "OWS" folks understand they got ripped off. They don't understand the how, but they sure get the "what" and "who."
All communities are made up of renters and "home owners". This can pretty much be restated as landlords and bankers to show the other side. What is the difference? Most landlords are local. Rent profits they earn are spent locally.
Under normal conditions, only a certain percentage of the population will qualify to buy a house. X% of incomes of the community will go to banks and X% will go to landlords.
When banks raised DTI levles to qualify for loans, it did two things. It increased the number of houses via new demand and of course the new "home owners" moved from rentals. This depressed demand for rentals and lowered rental income. Remember the rental income is spent locally.
The house payments were bundled up and sold to investors world wide....
What you have left over is homeowners with high DTI payments shipped out of the community and landlords taking in lower rents due to the housing glut.
It is not hard to figure out why there is less to circulate in local communities and provide the level of jobs that should be there. The bankers did their damage and left the scene of the crime.