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Home Purchases Plunge to Lowest Level in 9 Years

 
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Renting in Mass



Joined: 26 Jun 2008
Posts: 381
Location: In a house I bought in December 2011

PostPosted: Fri Nov 13, 2009 12:41 pm GMT    Post subject: Home Purchases Plunge to Lowest Level in 9 Years Reply with quote

Mortgage applications to purchase homes in the U.S. plunged last week to the lowest level in almost nine years as Americans waited for the outcome of deliberations to extend a government tax credit.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1_pyNFw6mbg&pos=5

This puts to rest any debate about whether or not the summer bounce in sales was government induced.
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admin
Site Admin


Joined: 14 Jul 2005
Posts: 1823
Location: Greater Boston

PostPosted: Fri Nov 13, 2009 1:15 pm GMT    Post subject: Re: Home Purchases Plunge to Lowest Level in 9 Years Reply with quote

Renting in Mass wrote:
Mortgage applications to purchase homes in the U.S. plunged last week to the lowest level in almost nine years as Americans waited for the outcome of deliberations to extend a government tax credit.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1_pyNFw6mbg&pos=5

Consider this - what if the actual cause was the opposite? What if it wasn't because people were waiting but because those who were planning to buy didn't wait and had already time shifted their purchases earlier? At some point when the urgency fades, the surge in demand created by the tax credit is going to be tapped out. They have tried to tap into a new pool of urgency with the recent extension by expanding it to high income buyers and existing owners.

Renting in Mass wrote:

This puts to rest any debate about whether or not the summer bounce in sales was government induced.

Yes, I think so too. What I wonder is was it induced more by the level of government intervention or the fact that the intervention was increasing? If continually increasing intervention is necessary to achieve a continued flat line in prices, that cannot last.

- admin
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Fri Nov 13, 2009 5:02 pm GMT    Post subject: Reply with quote

I think you guys are right, the $8k stimulus got a lot of people off the fences (which was its intention). I actuallly think Obama was right with this one, it worked as well as the "Cash for Clunkers". I think the rest of you delayed gratification types will get your rewards in time.

I think the science and art of this is finding the sweet spot to bring this down incrementally. Is it $8k or $5k?

The question is this Stimulus going to trickle down? Anything that puts money directly into the hands of people is better than giving to the Banks in my opinion. Best, is to get it into the hands of those that are problem solvers and innovators.
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balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Fri Nov 13, 2009 7:25 pm GMT    Post subject: Reply with quote

The trouble with that suggestion is that America imports many of those people and it isn't politically popular to give money to those who aren't American citizens. Even those who are may still eventually go back home and take the money with them. There was an article in Newsweek claiming that the recessions has caused R&D to start being outsourced as well so you might even be talking about sending money to citizens of other countries who aren't even living in America!
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