Housing.com News, Analysis & Opinion: Wednesday Housing News

Basically, the higher the Federal funds rate goes, the higher banks' lending rates go. If you've noticed a sudden increase in your credit card's APR in the past few weeks, this may be why. Those historically low mortgage rates may be coming to an end as well.

Greenspan's legacy may not just be a housing bubble...it may be a monumentally bad decision to toss caution to the wind and pray the post-Katrina building boom encourages growth and spending.

What you have to realize is that nine times out of ten, economists and financial advisors have no idea if they're right. They make predictions based on what they WANT to see happen, on what they THINK may happen, but they're as clueless as the rest of us.

The Bubble Meter clues us in to Jim Cramer suddenly deciding that housing is dead. See, that's EXACTLY what I'm talking about. Why do we trust these guys to tell us what to invest in and build our worth with?

The Housing Bubble reposted an interesting article from a Texas newspaper about the incredible boom in speculative buying in Texas. Take a note of these two paragraphs:

Roddy doesn't see that happening with many out-of-state investors. His big concern is buyers who take on more debt than they can handle. They may not realize the true costs of ownership, the effect of Texas' high property taxes, insurance and upkeep."

"When home values aren't rising quickly, as in Texas, and people are borrowing heavily, they're vulnerable. Roddy says that one in five foreclosure postings in Tarrant County is underwater, which means the owner owes more than the house is worth."

Now, Houston just absorbed over 300,000 survivors of Hurricane Katrina, many of whom will settle there or spread out into the Lone Star state. These people come from two of the poorest states in the Union, have lost most or all of their finances and records, and may be desperate for any kind of chance to get into a home.

Oh, and as a D.C. resident, I'm astonished that we can have a volcanic housing market, still-exorbitant gas prices, and the fourth-higest poverty rate in the nation all at the same time.

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Like most of you, I tend to glaze over at brain-numbing economic indicators and endless quibbling about percentage points. But the news of the Fed's raising of interest rates has some plain-English consequences. Basically, the higher the Federal funds rate goes, the higher banks' lending rates go. If you've noticed a sudden increase in your credit card's APR in the past few weeks, this may be why. Those historically low mortgage rates may be coming to an end as well. Greenspan's legacy may not just be a housing bubble...it may be a monumentally bad decision to toss caution to the wind and pray the post-Katrina building boom encourages growth and spending. What you have to realize is that nine times out of ten, economists and financial advisors have no idea if they're right. They make predictions based on what they WANT to see happen, on what they THINK may happen, but they're as clueless as the rest of us. The Bubble Meter clues us in to Jim Cramer suddenly deciding that housing is dead. See, that's EXACTLY what I'm talking about. Why do we trust these guys to tell us what to invest in and build our worth with? From the ROAD FROM FEMAVILLE Chronicles: The Housing Bubble reposted an interesting article from a Texas newspaper about the incredible boom in speculative buying in Texas. Take a note of these two paragraphs: Roddy doesn't see that happening with many out-of-state investors. His big concern is buyers who take on more debt than they can handle. They may not realize the true costs of ownership, the effect of Texas' high property taxes, insurance and upkeep." "When home values aren't rising quickly, as in Texas, and people are borrowing heavily, they're vulnerable. Roddy says that one in five foreclosure postings in Tarrant County is underwater, which means the owner owes more than the house is worth." Now, Houston just absorbed over 300,000 survivors of Hurricane Katrina, many of whom will settle there or spread out into the Lone Star state. These people come from two of the poorest states in the Union, have lost most or all of their finances and records, and may be desperate for any kind of chance to get into a home. Sounds like a recipe for predatory lending disaster to me. I'll be watching. Oh, and as a D.C. resident, I'm astonished that we can have a volcanic housing market, still-exorbitant gas prices, and the fourth-higest poverty rate in the nation all at the same time.