Credit & Debt: Homeowners Feeling The Pinch

The bottom continues to drop out of home sales in bellwether bubble markets such as Boston, and even though the realtors are desperately claiming that prices will drop no farther, I have no doubt we'll be seeing more price-shaving throughout the fall.

This much is evident by the slackening demand for home loans, even with the lower interest rates. Now, mind you, if you believe the Commerce Department, things are hunky-dory and new home sales are jumping. But who's really listening to them at this point anyway?

The simple truth is that homeowners are maxed out. Too many HELOCs and loans, too many credit cards with high balances, too-high gas prices, and soaring health care costs are all contributing to the weakening home loan demand. We may see some slacking next quarter as the gas prices fall, but then what'll be happening in the dead of winter?

There need to be some serious price reductions and more cuts in gas prices to keep the housing market from flattening out like a double mastectomy by those guys from "Nip/Tuck." Anything less is just delaying the inevitable.

Posted at September 27, 2006 03:33 PM

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The bottom continues to drop out of home sales in bellwether bubble markets such as Boston, and even though the realtors are desperately claiming that prices will drop no farther, I have no doubt we'll be seeing more price-shaving throughout the fall. This much is evident by the slackening demand for home loans, even with the lower interest rates. Now, mind you, if you believe the Commerce Department, things are hunky-dory and new home sales are jumping. But who's really listening to them at this point anyway? The simple truth is that homeowners are maxed out. Too many HELOCs and loans, too many credit cards with high balances, too-high gas prices, and soaring health care costs are all contributing to the weakening home loan demand. We may see some slacking next quarter as the gas prices fall, but then what'll be happening in the dead of winter? There need to be some serious price reductions and more cuts in gas prices to keep the housing market from flattening out like a double mastectomy by those guys from "Nip/Tuck." Anything less is just delaying the inevitable.