Let’s put this housing “boom” we’ve all heard about in perspective.
Let’s look at it not just with Progressive-colored glasses, but also with the frank stare of Main Street watching a rodeo clown wearing a presidential mask.
Stop me if you heard this one before:
According to a report by Goldman Sachs all is not that rosy in real estate. The benefits of the housing recovery have been targeted to those who least likely need it.
I’m not just talking about the widely reported disparity in prices between high-end and low-end homes.
It goes much deeper than that.
Half of all home purchases today are being made with cash, accord to the analysis made by Goldman Sachs.
The report studied data from the census, the realtors' association and the bankers’ association. What it found is worrisome.
For every dollar of purchase price, only 44 cents in being financed compared with 67 cents before the crash.
While it shows that banks can weather a real estate downturn, as can homeowners with such high equity, it also shows that they have accomplished this feat at the expense of broader participation in the housing market.
Mortgage origination in the United States is only about a third of the size it was at the market peak. The $1.5 trillion mortgage market is now only $500 billion, according to Goldman Sachs.
That means that it’s highly likely that you, and you, and you can’t afford to buy a home no matter how good your credit is if you don’t have the prohibitive cash down payment.
With the median home price in the U.S. at $214,200, that means that the average buyer is putting down $119,952.
Is that the kind of money most people have either in cash or equity?
No, of course not. And only liberals would try to convince us that this is progress.
“The analysis estimates that around 20% of all homes sold before the housing crash were ‘all-cash’ sales (or around 30% of sales by dollar volume),” reports the Wall Street Journal. “But over the past seven years, the all-cash share of sales has more than doubled, increasing by more than 30 percentage points, according to economists Hui Shan, Marty Young and Charlie Himmelberg.”
So, as long as you have anywhere from all cash to half cash to buy a home, congratulations, you’re a homeowner.
The rest of us? Well, who really cares about the little people?
And liberals have problems with “trickle-down economics”?
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