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Tuesday, April 19, 2011

Americans Shun Cheapest Homes in 40 Years as Owning Loses Appeal: Bloombreg

Due to the bubble and now decreasing home prices a strange dynamic is happening.  You have 30% of home sale now cash, which way above historical lows.  And you know you have people that could purchase a house renting, which decrease your pool of buyers.  
The most affordable real estate in a generation is failing to lure buyers as Americans like Pauli sour on the idea of home ownership. At the end of 2010, the fourth year of the housing collapse, the share of people who said a home was a safe investment dropped to 64 percent from 70 percent in the first quarter. The December figure was the lowest in a survey that goes back to 2003, when it was 83 percent.
“The magnitude of the housing crash caused permanent changes in the way some people view home ownership,” said Michael Lea, a finance professor at San Diego State University. “Even as the economy improves, there are some who will never buy a home because their confidence in real estate is gone.”
This is very detailed article and I would read the whole article.  However, this article says real estate is the best the buy in four decades, I have major issues with that statement.  I think it was much cheaper in the early 1990's, currently there is too much mortgage interest rate risk if rates go back above 7%
Read it all

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