Thursday, July 17, 2008

Is the Housing Crisis Really a Crisis?

You've heard the media scream for months that the nation is in a "housing crisis". Has anyone stopped and really examined the facts?

Dennis Kneale, a commentator on CNBC, recently examined the facts in a "Parting Shot" commentary on Business Nation (click http://www.cnbc.com/id/15840232?video=780461999 to see the video). In it, Dennis explained that we have approximately 120 Million homes in the U.S. 30% of them are owned free and clear (no mortgages), so that means that 40 million homes are not affected by the so called "housing crisis"

Out of the remaining 80 million homes, approximately 50% of those were bought before 2000. Since 2000, median home prices have increased by 53%. Home prices have decreased 12% in the last year, but even so if you bought your home before 2000 and sold, you would be ahead by 34%. By the way, the value of existing homes is only down by 1/4%!

Overall, 95% of all mortgage holders in the U.S. are current on the mortgages, that means that the "housing crisis" is affecting about 4 out of 120 million homes!

We've also heard that foreclosures are up 65% over last year, but did you know that only 2% of homes are in foreclosure. As Dennis said, "Where's the Crisis?"

Yes, some areas have been hit particularly hard by foreclosures such as California, Nevada and Florida, but these are the same areas that saw the largest increase in value. California has more foreclosures than 40 other states combined!

So before you buy into the hype, take a look at the facts!