Stupid People Say Stupid Things

From a Yahoo! article I read this morning:

“Rather than creating wealth, homes had enabled people to gain cash by refinancing mortgages and live beyond their means until the crisis sent them into bankruptcy.”

You can find the article here:

http://finance.yahoo.com/news/challenge-dogma-owning-home-182926523.html

How can I explain this? If there was money to pull out then the house created wealth.  Just because some home owner decides to spend it on a SUV and a Bahamas Cruise rather than leave it for their future…  Jeez.

2 Comments

Filed under Misc. Real Estate, Uncategorized

2 responses to “Stupid People Say Stupid Things

  1. Pat

    In a balanced home market you can sell your home and move to a new location. It was that way for over 40 years. Renting does not increase productivity, jobs or smarter students. Buying a home in a good school district allows you to invest in your child’s future. Real estate is the best way for the average person to create wealth.

    Individual living beyond their means caused themselfs to go into bankruptcy, not the loans. Watch some Suzy. Beware of decks of cards.

    The housing crisis was caused by the belief in the greater fool to buy their home. Individuals believed that homes would always go up in value and could take out money out of their home. It was also feed by realtors, appraisers, mortgage credit swaps, TV shows and lack of mortgage standards.

    The median price of homes increased way beyond median income. Newton took over and prices came back down.

    Many people believe that the 2007 value of their home is still what it is worth.

    When the FED stops injecting money to hold interest rates down, guess where home prices are going to go. If you are going to stay in a home, take the long money and buy or refinance, the pension plans holding the bonds are going to take a bath. The resulting inflation will eventually bring your home back to 2007 levels and beyond.

    Remember Truman and study history.

  2. That last paragraph is something I keep thinking is coming…and yet it never does. How long can they hold interest rates down?

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