Posted on 04/20/2012 4:25:55 AM PDT by Kaslin
Just 49 percent of homeowners in America now believe their home is worth more than they paid for it.
Rasmussen Reports has asked that question for years, and it has never before fallen below the 50 percent mark. This represents a sea change in personal finances that challenges core assumptions about the way our economy works.
Most Americans were brought up to believe the cornerstone of good financial planning was to buy a home, pay the mortgage on time and watch the equity grow. That doesn't work at a time when home values are declining.
Economists measure the lost equity in housing to be in the trillions of dollars. But the impact on individual families is even greater. Consider this: Four years ago, 80 percent of homeowners thought their home was worth more than they paid for it. That number fell to 62 percent last fall and 49 percent today.
In just four years, roughly one out of three homeowners went from having made money with a supposedly safe investment to seeing all the gains disappear. That's a stunning turnaround for people who thought they were doing the right thing and buying their share of the American Dream.
Adding to the sense of gloom, homeowners don't think we've hit bottom yet. Just 21 percent believe that their home will go up in value this year, while 25 percent expect further declines.
Even looking ahead five years, only 46 percent believe their home will go up in value. Such a low number would have been unthinkable until recently, and it's one reason many homeowners feel trapped.
The housing crisis was triggered by a soft economy, and most Americans recognize that it won't be solved until the overall economy regains strength. They're not looking for a quick fix with some magical new housing policy. Instead, they have serious concerns about jobs, inflation, federal spending and deficits that cloud prospects for a robust recovery.
But while the soft economy was the trigger, most homeowners recognize that the underlying cause of the housing crisis was a corrupt relationship between the federal government, elected politicians and well-connected financiers. While the housing market was collapsing, the financiers were getting bailed out.
Seventy-seven percent have an unfavorable opinion of Freddie Mac, and 73 percent say the same about Fannie Mae. Those two government-sponsored enterprises changed the rules of the mortgage game. One "innovation" was to encourage policies that let people buy a home with no money down. Most Americans reject that type of new math.
Fannie and Freddie, encouraged by politicians from both parties, sought to make homeownership available to everyone. But only 26 percent of Americans believe that should be the guiding principal of federal housing policy. Sixty-three percent think the primary goal in issuing a housing loan should be whether the homeowner can repay it.
By ignoring generations of experience and the common-sense wisdom of the American people, Fannie Mae and Freddie Mac broke the housing market. Even more, they turned the American Dream for millions into a financial nightmare. Adding insult to injury, Fannie and Freddie stuck taxpayers with a bailout bill currently estimated at more than $300 billion -- with no end in sight.
It looks like you are using the word ‘bond’ instead of ‘taxes’ because it will raise less flags here than 'taxes'. More taxes on me is exactly what I am trying to avoid.
There is no constitutional right to do anything you want on land you own at any time you want especially when it will raise taxes on others to pay for the support of it.
A development tax would pay for the required infrastructure to support the new houses like NEW schools, roads, traffic lights, etc; and that would have slowed growth through higher prices for new homes. Up till now and now I get the bill for those in higher taxes.
Maryland state income taxes (half goes to the county directly) are huge.
Homebuilders create jobs and a tax base. Usually, they don’t build, if there are no buyers.
Just like massive housing development inspired VOTER acceptance of higher taxes to fix the resulting crowded public schools and roads, the traffic jams and major increase in drivers resulted in many more speeding cars which inspired acceptance of speed camera vans (after red light cameras became accepted) so a private company can mail us a bill for alleged speeding.
And if the post office loses that bill so it never gets to you, the fines double.
Thanks Ryan (builder) and others for the progress. The new Americans you transplanted here, mostly liberals, accept big brother.
They did pass a bill last year extending discimination laws on housing and employment to Tran-gender’s who self-identify themselves as the sex they are NOT. Way to go progress. We lose rights and gain new rights, right?
Socialize that!
Please read my later comments, I go further into this pet peeve.
People leveraged their houses to buy consumable items cars, cheap crap at Wal Mart and vacations. It doesn't take a genius to know that, but it takes a moron to miss what happened.
” What amazes me is that homeowners dont get together and form a political union to slow new housing development when house prices are going down.
If house prices are going down in your area look around and see if new houses are being built. Your local politicians control that rate of growth, “
Most of my assets are tied up in realestate, and I’ve lost my butt over this....not to mention the lousy savings rates!
But I’m really surprised that you would advocate this kind of economic control.
I am talking about at the local (county) level where these permits and zoning changes have to be approved(YES,THEY HAVE TO BE APPROVED, THIS IS NOTHING NEW) I usually oppose anything being done at the Federal level even when Rs are in charge when they think big powerful government is patriotic..
I go more into my rationale and specific proposal here
I forgot to mention the county charging me to buy affordable homes for those less well off so they can bless our county.
In fact, that massive science and high tech center on Virginia 28 (near the Dulles/Manassas area) is there because of Maryland's high taxes.
Well Obama’s left hand man gov O Malley here has managed to pass multiple middle class tax increases on us and still easily get re-elected. And he hasnt given up on an increase in our income tax and gas taxes.
This once Republican county I complain about went for him (MoM) twice and Obama once, and they will again pick Obama.
Thanks sickoflibs.
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