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This is How to Fix the U.S. Housing Market
Real estate research firm Reis reported today (Thursday) that apartment rents are rising at the fastest rate since 2007. Reis said vacancies hit a 10-year low as rental rates for the second quarter jumped 1%, the biggest increase since the financial crisis. Compare this information with recent data on pending home sales, new home sales, and housing prices that has been more promising than months' past and it seems the U.S. housing market is on the mend. That was the topic posed to Money Morning 's Chief Investment Strategist Keith Fitz-Gerald during a visit Thursday to Fox Business' "Varney & Co." program. Fitz-Gerald outlined what the recent housing data is telling us about the U.S. economy and the future of home prices and sales. He also suggests what the U.S. government should do to encourage a stronger economic recovery and let people once again believe in the American Dream of home ownership. Check out this Q&A session with Fitz-Gerald about the latest developments in the U.S. housing market. You can see all of Keith's analysis in the video below. Click here to continue reading...
Real estate research firm Reis reported today (Thursday) that apartment rents are rising at the fastest rate since 2007.
Compare this information with recent data on pending home sales, new home sales, and housing prices that has been more promising than months' past and it seems the U.S. housing market is on the mend. That was the topic posed to Money Morning's Chief Investment Strategist Keith Fitz-Gerald during a visit Thursday to Fox Business' "Varney & Co." program. Fitz-Gerald outlined what the recent housing data is telling us about the U.S. economy and the future of home prices and sales. He also suggests what the U.S. government should do to encourage a stronger economic recovery and let people once again believe in the American Dream of home ownership. Check out this Q&A session with Fitz-Gerald about the latest developments in the U.S. housing market. You can see all of Keith's analysis in the video below. Q, Fox Business' Charles Payne: Will the rising rental markets push people back to the American Dream of owning a home? Does it bode well for the housing markets? A, Keith Fitz-Gerald: No. I interpret this differently. What this says to me is that people don't trust the banking system, and they'd rather continue to shed debt. This places higher demand on a limited number of rental units so rents are rising. Loading the player ... jwplayer("container").setup({ autostart: true, controlbar: "bottom", flashplayer: "http://s3.amazonaws.com/moneymappress/player.swf", file: "2012/July/20120705_MoneyMorning.mp4", height: 360, width: 600, provider: "rtmp", streamer: "rtmp://s20mlppiazmugb.cloudfront.net/cfx/st", }); Q: At some point isn't there a "Eureka" moment when people realize how much money they're handing over to the landlord and would rather buy a home? A: Under normal conditions, yes. But these are hardly normal times. Look at the nonsense in San Bernardino, CA where the government has come up with the ludicrous idea of eminent domain to take over underwater mortgages. At some point, somebody has to take the loss. The government's policy of "all gain, no pain" doesn't work. It can't work. Sooner or later, somebody is going to have to eat it. Q: So what can be done then? What can turn this around? Can the government say something, or can the president say something, to make people feel like the coast is clear and they can get back to the American Dream? A: Go after the banks. Banking should be boring. Eliminate their ability to securitize this stuff and force them to take write downs that, to date, they still haven't. This began with the banks and will end with the banks. Whether or not that means we wind up with a banking system as we know it or something entirely new remains to be seen. But you do not take more money and give it to irresponsible people. You let them fail and responsible people will come in and take over. The markets want to fix this, but can't because of the government's incessant meddling. Related Articles and News:
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