Mortgage News Home Builders Please Listen

by Corrine
(Dallas, IA)

I'm not surprised! Mortgage news and stock market reports are overflowing with stories about home builders not weathering the housing crisis well. My solution? Home builders should build more affordable homes.

If people could really afford the homes that are on the market, they wouldn't need incentives to buy them. In fact, what people need more is the assurance that they can find a nice home within their comfortable price range.

We got into the mess we're in because real estate agents get too clever when they're trying to get a sale. Since they are paid on commission, the more expensive the house they sell, the more they make.

We watched back in the '90s when they were convincing people to take variable rate mortgages and balloon payments just to sell houses. We knew clear back then that a disaster would happen, just like it's happening now.

The biggest problem in our society is greed. In this case, home builders build fancy homes hoping to make big bucks, real estate agents sell homes people can't really afford to make their money, and home buyers want it all right away without working for it.

A real estate agent told me a few years back that the biggest problem she has in dealing with young couples is that they want everything their parents have, but they don't want to work a lifetime to pay for it like their parents did.

After World War II, people were living the American Dream, because they didn't aspire to own so much. A lot of small, tract homes were built, and people were happy with them. Why does everyone need a huge, fancy home now?

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Know How Much You Can Afford

Dear Corrine,

A recurring theme among contributors to my website is the importance of knowing how much to afford in a mortgage. Before I retired from mortgage lending, my clients asked me how much they could afford in a mortgage and I'd give them an answer they did not expect.

See if my answer surprises you too. Go to How Much Can I Afford In A Mortgage and see if you agree.

As a side note, Corrine...you just created your own web page. To share your mortgage news page, right click to copy/paste the link into email: Mortgage News Home Builders Please Listen.

Sincerely,
Kate

P.S. Go to my Best Mortgage Rate Blog, an entertaining source of mortgage information. Subscribe now to the RSS feed.

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