Redefining The American Dream

Some Recently Expressed Opinions...

Posted on Thursday, April 8, 2010

Fannie Mae recently released its survey of homeowners. Some of the mroe interesting opinions expressed;

More than 1/2 of the homeowners surveyed said they are making personal sacrifices to own their home

24% saying they are “sacrificing a great deal.”

88%, including 70% who are delinquent on their own mortgages, said walking away from an underwater mortgage is not acceptable.

60% believe buying a home today is harder than it was for their parents

68% think it will be even more difficult for their children.

Homeowners and renters alike are taking a more cautious approach to homeownership; 75% of renters polled believe that owning makes more sense than renting, but 23% said they will buy a home later than once planned.

Americans with fixed-rate mortgages with predictable payments are significantly more satisfied that those with other types of mortgages indicating a possible rebalancing of attitudes about housing and homeownership by adopting more realistic, long-term approach and being less willing to take on unnecessary risk. Sustainable housing of this nature is better for the economy, the housing market, and American families.

William Emmons, economist and assistant vice president at the Federal Reserve Bank of St. Louis recently expressed the following opinions;

Emmons cited three primary risks to the nation’s economy and fragile recovery: unemployment; the probability that recent high rates of productivity won’t continue; and that ever-pressing matter of commercial real estate.

Emmons says it’s the first time since the 1990s that CRE has played this central of a role in the overall functioning of the national economy.
Until now, Emmons said, “Most of us – inside the Fed and outside the Fed – really didn’t see quite how dangerous the situation with the credit bubble really was.”

Emmons feels we’ve now hit a stage of involuntary deleveraging; “The long-term leverage trend in the U.S. can be summed up in one word: Up,” he said. But now, “we’re moving in reverse and it will be some number of years – and I do mean years – before we get back to sustainable debt-to-income, debt-to-asset levels.”

Emmons called the disappearance of home equity “absolutely the scariest picture” of his presentation.

On the CRE crisis, he noted; “this is not your father’s economic recovery. It’s going to be a struggle and the financial pressures are likely to be with us for some time.”

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