How the mortgage crisis is affecting the real world economy (and what you can do about it).
Linda says:
The stock markets may have recovered from the credit crunch but the majority of analysts expect that the housing market in the US is not going to recover for quite a while. 150 mortgage companies have closed and the number of unsold homes is at a 7 year high. In the UK, where house prices are even higher, a fall in housing prices is forecast.
Obviously, anyone who has worked hard to own their own home wants to see its value rise, not fall. I am writing from Australia, where we have not yet had much of a price fall, but the number of mortgages being entered into is decreasing and some non-bank lenders are having trouble raising money. If the lenders have less money to lend, then fewer people are going to be able to buy houses.
This is an issue that affects both buyers and sellers.
Housing affordability is a huge election issue here, with many younger people feeling totally priced out of the housing market. Excess levels of debt are also a major issue with interest rates in Australia forecast to rise… Do you have a mortgage that would be affected by a rate increase or are you a first home buyer who is worried about affordability?
We would love to hear your perspective!
Back in the US, while current officials are saying calming words, Mr Alan Greenspan, the formed Federal Reserve chairman is not so reserved. Busily promoting his new book across the globe, he has admitted that he would not be surprised if housing prices fell by double digits into 2008.
House prices, mortgages and levels of debt are a world-wide problem. Read the article in which some of my ideas are included in Mortgage Woes - What to do?
We’d love to hear how you think these issues will affect you.
