The ultimate confidence killer
The first wave of foreclosures came after the implosion of the wild-and-crazy subprime mortgage industry.
Now, with layoffs mounting, we may soon start seeing the second wave as the burgeoning ranks of the unemployed, from factory workers to executives, struggle to make their mortgage payments
Financial services firms, the economic engine of the Hub, are now slashing their payrolls, as the Globe reported yesterday. And the national recession, which just a few months ago had been felt more lightly locally, is now hitting home here.
Get ready for more foreclosures in the suburbs, including in some of the tonier towns. But the impact goes much deeper than that.
The layoffs are the ultimate confidence killer. And the timing couldn’t be worse. The Fed just launched an ambitious drive to spend hundreds of billions to lower interest rates.
Some of the cuts are coming from the very same companies that were given billions in infusions of government capital.
The prospect of rates dipping below 5 percent is clearly exciting. But it’s also hard for a lot of people, especially would-be home buyers sitting on the sidelines, to forget about all those pink slips.
One comment on my post yesterday about falling mortgage rates says it all.
“Citigroup cuts 52,000 jobs. Fidelity cuts 1,300 (so far). State Street announces cuts of 1,800. AT&T announces 12,000 jobs cuts. And those are just the larger employers that make the news. Lower rates don't do a whole lot for those out of work, or those worried about joining them. The correction will continue.”
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As a renter and a prospective 1st time homebuyer, Why would I buy now? All these people can't afford their homes and they expect me to take their place for what they paid or perhaps slightly (10%) less than they paid? Its Insanity. I will rent for as long as it takes untill buying a house isn't a dangerous thing to do. My rent is $1,200/mo to own a home that costs $300k (which I cant find any at that price I would want to own) would cost me $2,600 month with Mortgage/Interest/PMI/Taxes/upkeep/heating... Housing has much further to fall... And nobody wants to hear the truth but people my generation (age 28) have 30-50k in student loans to pay off too and now you want us to bail out previous generations (Baby Boomers and Gen X? We arent going to it. We are not gonna willingly take on that kind of stress to afford a home when we can rent for less than half what they pay to have a home. Do I want to own yup! My firends have mopved to NC, Virginia because housing is drastically more affordable. Mass is going to see avg prices vall to 250k It has to.
WASHINGTON (AP) -- A record one in 10 American homeowners with a mortgage were either at least a month behind on their payments or in foreclosure at the end of September as the source of housing market pressure shifted to the crumbling U.S. economy. The Mortgage Bankers Association said Friday the percentage of loans at least a month overdue or in foreclosure was up from 9.2 percent in the April-June quarter, and up from 7.3 percent a year earlier.
Do Not Buy Now, Will Fall More!!! (30% more)
yup. As some of us have been saying for a while, each time someone (like sunshine & lollipops) posts that financial jobs are immune.
This stuff was basically announced months ago.
And then there are the national job numbers, which remain as hideous as one might expect.
But Scott, Massachusetts is immune. Now is a great time to buy. Prices can only go up from here. Blah, blah, blah.
housing in MA is going to get absolutely smoked.....
Nice upbeat post by Renting in Waltham. I don't blame you for waiting, "until buying a house isn't a dangerous thing to do." High-priced metro areas like Boston and New York are, and perhaps have always been, a challenge for first-time buyers to break into the market. I suspect we'll continue to see the migration of jobs in a number of industries to locations where housing is more affordable than parts of New England. The real estate marketing issue you've raised is problematic (dangerous thing to do). The concern is probably shared by other folks. I don't recall having that feeling when I purchased my first home at age 32.
This blogger might want to review your comment before posting it.
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