Did we really need the government stimulus to incentive people to buy houses?

It ended last month now home sales have dropped 33%, the lowest level on record…gee, even with historically LOW interest rates, without those government programs, NOBODY wants to buy a house right now. I’m really fed up with the idiot I helped put in power…his grasp of economic reality sucks. The housing assistance programs only prolonged the real estate recovery, which still can’t begin until we increase interest rates.

Answer #1

I dont beieve the stimulus has any chance of convincing a person of buying a house right now, things are still so bad. In our town people are getting laid of right and left still because work has slowed down so much, it would be silly to commit yourself to such huge bill, everyone that i know that rents, including us, is staying put.

Answer #2

I have always been a proponent of laissez faire capitalism. Without the perfect choice of personnel in office… government tends to do more harm than good… even on the rare occasion it wishes to do good for the populace.

Lately… our government has been doing the state equivalent of cutting off its nose to spite its face. eg:

Big banks who lost their shirts while fleecing the public through derivative futures scams are too big to fail… the govt decides to take money from the people… in order to ensure those same people will be able to borrow their money back at interest.

Health care costs have increased dramatically and fewer businesses can afford to provide insurance… the govt fixes the situation by mandating those unable to afford the service to find a way… perhaps by selling organs thereby killing two birds with one stone.

The government thinks that since the FTC’s lack of oversight of the energy companies compliance to modernized standards led to calamity… cap and trade should be instituted to help enforce green standards. In other words… govt oversight failed… so we should give it even more money. The carbon offset credits of cap and trade is the ponzi scheme that will replace derivative futures. Ken Lay dreamt them up… search engine it. It will kill alternate energy research and small businesses to boot.

Now there is talk of bailing out the old media. I reckon it is too big to fail too… regardless if it has lost the respect of its readership. This at a time when we are all on the verge of engaging in austerity measures. Senator Lieberman has endorsed a bill to grant the President total control of the internet… one can only assume that locked doors are used to conceal the screams.

It is obvious what is going on here. Those in power are using it to sure up their coffers as the rest of us are left to founder. The inevitable collapse brought on by our central bank is finally obviously insolvent… and the rats are fattening up to ensure their buoyancy in the wake of the ship beginning to sink.

Answer #3

Hope you do not mind if I put in my two cents worth, not from USA but I think a government funded incentive to encourage homebuyers to purchase property is always a good thing. The more houses which are being built, there will be an increase in work for people within these industries and also companies who supply the products and services for these homes to be built, so the cycle goes in a full circle, everyone benefits not just the new homebuyers. In Australia, our government (frigging suck big time, Labour Party, kicked my beloved Prime Minister Kevin Rudd out of office) gave first time homebuyers a $14,000 cash up front as a deposit towards their first home and the increase of people owing and looking for homes out-weight the availability of homes on sales that were on the market. Obviously many people took advantages of this incentive, buy purchasing a house under one sponsor’s name and then later on purchasing another house under the other spouse’s name, which cost the government $28,000. Unfortunately, with the incentive in your country, would be incentive program be strictly for USA residents or is it open game for anyone who can afford to invest and buy properties in the USA? If it is the later, I can foresee over-sea people who are not permanent residents of US, taking a bigger slice of the cake then your own people………To Mandy, if your economy is not doing well, those who do have jobs, buying a house is the right time, as the prices of homes will be lower then what it was, banks would offer loans without the inflated interest rates.

Answer #4

If people cannot afford to even rent a place, wouldn’t you think the price per rental would be lower then when people could afford. The number of people who are looking for rental properties would be on a decrease which means rental prices would decrease too as there are more properties to select and choice from..Consumers’ paradise…….If a country is doing well, and people have wealth, they would want to invest, which means buying up properties which means an increase in properlies being sort after and the price of rental goes up…Quite logical :)

Answer #5

I disagree I am of the mind that housing prices should be left to ebb or flow as demand would dictate. Moreso because the price of housing is artificially inflated in order to maintain unfair banking policies… I don’t think a person should spend his or her life paying for a house… but that’s the way things are today. Since banks loan money at interest… there is never enough of it in circulation to be repaid… it is a physical impossibility. This squeeze on capital artificially inflates… undoing any boon seen by governmental or financial manipulation. It also falls into the rub of robbing Peter to pay Paul. The money borrowed must come from somewhere… either through the central banks creation… which drives up inflation… the hidden tax… or from taxes levied by the government. It’s really just a wash economically. It is all about creating debt owed to the central bank… and this is one great way the bank imposes its leverage… by forcing people to walk through its doors if they want a roof over their heads.

Answer #6

Well said Miscy. But I will need to disagree with your first two sentences. Majority of people do not spend their entire life paying off their mortgage. Most people upgrade as they go, little house first, fairly biggish mortgage, sell the house when the market is right, double or triple the profit they made from the original price they paid for the house and upgrade to another bigger home but without needing to borrow big from the banks as they use the first house to offset what they can borrow……Yes, I understand what you are saying on the last part of your comment, the government will need to recoup the money they put out to encourage people to invest and yes, this will mean increase in infrastructure cost, increase in prices for everyday goods, increase in education cost, increase in health facilities cost and the list goes on, all these cost ends up being the burden of all taxpayers……But, I think there needs to be a balance, a government needs to bring out an stimulus incentive to encourage people to spend rather then save. As my step-dad once said to us, ‘today’s cash will be less then the cash we have in 5 years time, so if we have $20,000 now, it will be worth maybe $50,000 in 10 years time”…..Also, one cannot always blame the banks for taking people’s home, if a borrower knows they are borrowing outside their means, that is, they know it will take two incomes to pay the mortgage off, then it is the risk the consumer takes…..Why have a large mortgage and live in a large house when you know anything can happen down the track and one can be reduced to one income which means goodness for the banks, they repossess their house and the hard earn repayments one has made so far.

Answer #7

Houses are a commodity. Their value is intrinsic. Though prices may rise and fall somewhat due to the demand on the market… the value of a house in its dollar sense is a gauge of inflation. The value of the house remains the same… the value of the currency falls or rises… and since the inception of central banks… it has inevitably fallen. Technically your step father is correct… inflation grows faster than savings… especially if the money isn’t accruing interest itself. This is because of the central banks hegemony on the issuance of currency. In fact… it is the desired outcome of the central bank. Should a person accu*mulate enough money to live the rest of their lives on… they wouldn’t need to borrow money at interest from the bank… they would be self sufficient. Instead of spending the money… invest in some commodity that cannot be manipulated… something of intrinsic value… perhaps housing… it isn’t the best choice… but it isn’t bad.
This is the reason banks like people to have to finance their houses out over a lot of years… the interest charged on a 30 year mortgage typically exceeds 100% of the money borrowed. I know that people should use judgement when purchasing a home… I’m not dismissing the culpability of the public… but this form of extreme usury can better be called loan-sharking. It is time to get rid of the middle men.

Answer #8

In a word….NO….in my mind, the housing bubble was created by the government forcing banks to make bad loans….and the banks did, and loved it because they were making money hand over fist…..the literal house of cards….pay up time looming in the future. When that time came, it was a scramble to see who could out blame the other. The stimulus was just another round of passing bucks between goverment and banks. The “people” were never intended to benefit from it.

Fruitie….The only way to “move up” your housing is to move to a place where houseing is cheap. Like selling a piece of sh*t house in California for $500,000 and moving to Montana and buying a beautiful home for the same price or less. It doesn’t work moving around in the same location….Housing costs are set. If YOUR house increased in value, so did every body else’s…all you can do is buy one of equal quality and value.

Until the economy actually “settles”….which might take the rest of MY life….housing is going to be an iffy investment. Interest is cheap right now, but nobody has any money….Unemployment is high, and those who are working can see the writing on the wall….they will have less money in the future, once taxes really kick in…and the dollars they do have are only worth 75 cents.


Answer #9

The point is….rent can only go down so far….so what if the rent dropped from $700 to $450, if you have NO money? Some landlords would choose to leave a place empty than get $200 a month for it, simply because of the cost of keeping it liveable, is higher than the rent being taken in….To get into a place…first and last months rent, and a damage deposit can run a person over $1000….on a $500 place….

Answer #10

Actually I just bought my first house. Signed my closing on May 7th. And yes that $8000 did help tip me towards buying the house now, and the fact that housing prices have gone done & buyer’s have much more leverage with how the market is.

But do keep in mind I have always wanted to own my own house. I hated renting. So it wasn’t like the stimulus made me think ‘ hey I should buy a house’ it just helped make the whole process more feasible right now.

And as far as comparing it to a rental - I’m paying about $65 more per month for my nice 3 bed 2 bad house on .2 acres as apposed to renting a POS 2 bed 1 bath trailer house on 1/3 of a tiny lot. And with my house being only 3 years old I might actual come up even when you count in utilities and everything compared to renting that trailer house.

Also I have a job where the company would have to go under for me to loose it, and so far we have slowed down some but are doing just fine.

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