Your Home As a Credit Card or Your Own Personal ATM The Bears Say – Many people have turned their homes into ATMs or credit cards. Because of cheap money, mortgage rates are at 40 years lows, the mortgage refinancing industry has crafted many new and flexible refi deals that have proven irresistible to home owners. This combined with the massive increase in valuations have allowed home owners to draw down on this new equity. The recent consumer spending boom has been fueled by this cash Largely out of homes phenomenon. Are many over extended? If property values stabilize or more disturbing – drop, the economy could run out of steam. That means less people to buy homes, the housing would supple stems and further compromise the real estate market, glutting the market with many unsold homes, setting up a cycle of lower prices. The Bulls Say – Considering global realities and fair values, home prices have more upward pressure. Home mortgage delinquency rates are less then 1%, and of no real concern. Despite massive refinancing, home equity owner is a record 9.000 billion, even if prices were to level off home owners are in fine shape. And what about baby booms, some 77 million strong, who will soon be entering the 65-75 age bracket. This age group has the highest percentage of home ownership, at 83% being 69% for all age groups. This means there is more demand on tap, not less. As Fed Chairman Alan Greenspan recently remarked, there is serious lack of build-able land in many areas, and what about the on going massive immigration, legal and illegal, all this means a continuation of pressure on existing home prices. ; IS YOUR HOUSE IN A BUBBLE-BUBBLE OR IS IT LIOUS? The Bears Say – Lately an Increasing number of market forecasters and industry experts have become Concerned with what has been termed the "housing bubble". In the last seven years prices have soared in many areas of the country, growing at a average rate of 15% per year for the entire country, where as the norm is around 6%. Super HOT Real Estate Market areas: Gains since 1999 – Metro New York up 78% – up 97% Los Angeles – San Diego up 111% The Bulls Say – But do a few heated up areas create a real estate bubble? There are many experts that say that there is no bubble at all, and can give reasons to support this spectacular move in price momentum. Real estate was clearly undervalued considering a global economy. America remains a haven of safely in world filled with uncertainty. USA homes and real estate, look attractive to many foreigners like the the Europeans and Japanese, both the yen and euro have appreciated against a weak Dollar, making our real property – to bargain. When those holding Euros buy, they get in effect as much as a 30% discount, on USA real estate, Because Of The Increased value of the Euro, and the Japanese have similar advantages.There Ahead Is an Oil Slick, That Could Be of "Interest" to Youth Bears Say – The rising tide of Crude Oil prices is breaking all records, surfing up to $ 60 a barrel, this will eventually negatively impact the economy. Not only does crude oil effect the consumers through higher gasoline and heating oil costs, but crude oil products are used in a large number of manufactured goods. Business costs and consumer prices will ignite inflationary pressures, and inflation means interest rates must also be driven up. These higher crude prices and interest rates will also have the potential to slam business profits. High rates mean Increasingly variable mortgages will become unattractive, and higher rates for new fixed rate loans will put the squeeze on home prices.The Bulls Say – Bring it on, make my day. Inflation has always been good for real estate prices. If mortgage rates go up, homes inflated values will more then compensate for that. Inflation is a two edged sword; mortgages are paid back with cheaper dollars, in effect you get a mortgage loan discount. The resale market is benefited, Because mean higher home sale prices, that extra cash can be put to increase the down payment and making mortgage payments STOCK MARKET BUBBLE affordable.NASDAQ REVISITED The Bears Say – We are seeing double. Is the same pattern that brought the stock market to ground level, revealing itself in the housing market? Over inflated values, just mean another boom and bust cycle.The THE DOOM SAYERS Bears say an imminent super crash is near. A real estate crash will trip up the economy, sending consumer spending over the cliff, and negatively effecting stock prices and business profits.The Bulls Say – Comparing the rise in home values to the Nasdag-Tech stock bubble of the late 1990's, is Nothing but a little soapy water and so much hot air. Home prices are on a solid foundation. The incredible wealth created in recent years world wide by economic growth in both China and USA are fueling the increase in prices of all tangible assets, like real property. Home prices have been effecten positively Particularly in areas that are greatly ; benefited from global trade, like San Francisco, New York, Miami, San Diego and Los Angeles. That's not the stuff of bubbles, just powerful market forces at work. DealsWhether Creative Refi you are buying a home, refinancing or need debt consolation, use this convenient mortgage checklist created by HUD, Department of Housing and Urban Development to assist you in the home buying / refining process. And of course use the Internet to shop rates and packages that meet all your requirement.
