Here’s a headline o’ the times, courtesy of The Wall Street Journal though it’s a shame that we were ever in a place where buying a home was anything other than buying a place to live:
“Fed’s Hoenig: Mistake To View Housing As Investment Opportunity.”
The article stemmed from a statement issued by Thomas Hoenig, president of Federal Reserve Bank of Kansas City, who said during testimony at a field hearing by the U.S. House Financial Services Committee’s oversight and investigations subcommittee in Overland Park, Kan. that “if the American people are looking at the housing market to be their investment opportunity, I think they are making a mistake.”
This no-brainer comes with the news that, for the 17th month in a row, foreclosure filings have topped 300,000. In July alone, In 92,858 homes were repossessed, according to a New York Times editorial that cited data provided by RealtyTrac.
“As repossessed homes are put up for sale, house prices are likely to fall further. As prices fall, more borrowers end up “underwater” — owing more on their mortgages than their homes are worth. That’s a big risk factor for default, especially when coupled with high unemployment. Moody’s Economy.com estimates that 1.9 million homes will be lost this year, down only slightly from 2 million in 2009.”
What’s more is that the editorial goes on to cite a staggering figure — and one that we already know — that fewer than 400,000 loans have been permanently modified through the administration’s loan modification program and that just over 1 percent — $3.21 million — of the program’s $30 billion allotment has been spent in the program that is voluntary for lenders.