"With home prices in danger of falling this year for the first time in at least four decades, Americans are turning wary about borrowing against their houses to pay for vacations, education or remodeling projects. In a reversal of the ``wealth effect,'' people who once viewed soaring home values as a rationalization for higher spending appear to be pulling back. "Really? But I thought this housing stuff wouldn't spread?
"The sharp decline of the subprime housing market offering high-cost mortgages hasn't yet hit bottom, the head of home mortgage buyer Freddie Mac said yesterday.The number of home buyers starting such loans peaked last year, and interest rates for those buyers are due to rise in the next few years, which could cause foreclosures to spike further, Richard F. Syron said in an interview with The Associated Press."And in the first public acknowledgement I've found that the real problem here is DTI, and that there's really no way to fix it other than for there to be a major credit contraction, we have this:
"Theyve over-obligated themselves. Of course, there are always the ones who have lost their job or have medical bills they cant pay. But more of them are getting hung up with credit cards or house payments they just cant afford, said Vicki Hughes, program coordinator for Consumer Credit Counseling, a nonprofit counseling service managed by Family Resource Center."I'd say "I told you so", but that's getting old, isn't it?
"In turn, they filed a lawsuit March 30 against the bank; their real estate broker, DAlessandro & Woodyard; their real estate agent, Samir Cabrera; and First Home Builders, accusing them of mortgage fraud, securities fraud and breach of contract."Next up is the fact that the Euro appears to be headed for even more record highs against the dollar, and that we have refinery capacity problems in the US - pushing gas prices higher, with a prediction that we may reach $4.00 this summer.
"China ordered banks to set aside more money as reserves for the seventh time in 11 months to try to prevent an accelerating economy from overheating.Now that, all on its own, is probably not enough to set off a major blowoff in the market.
Lenders must put aside 11 percent of deposits starting May 15, up from 10.5 percent, the central bank said on its Web site. "
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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