Annual Existing-Home Sales Fall Most in 17 Years Sales of previously owned homes fell slightly in December after two consecutive months of modest gains but took their steepest annual drop since 1989, the National Association of Realtors reported yesterday. But home prices rose 1.1 percent for the year, and the supply of existing single-family houses, townhouses, condominiums and co-ops for sale shrank from November to December -- offering some hope that the housing market may be on the mend, economists said. http://www.washingtonpost.com/wp-dyn/content/article/2007/01/25/AR2007012501734.html

Some of what you are seeing is people overextending on homes because it's so easy to get a loan. They're buying over their heads. Also - some of the record foreclosures are because people tapped into second and third mortgages for fun money and now they've lost some equity maybe and it's too tight to keep afloat. The job market is strong so that's not really it. There needs to be change in lending to protect people from borrowing too much. Rather like protecting people from their selves really. Years ago it was much harder to get a loan. Let's face it - we're all getting a bit greedy with the homes. Bigger, better, granite countertops, etc. We want it all. I'm just saying it's not all the market as to why there are record loses.

I agree with your comment. People are no longer happy with the smaller house. Everyone wants the $250k home and are willing to go without furniture or even eating to get it. Many times these consumers will get a zero interest loan hoping the whole time they live in their new homes their home will only increase in value. That by the way is why Subprime lenders are willing to lend these people money. They are counting on these same homes to increase in value. The average family of 4 earns about 60k annually, but the average home sells for more than $220k. a 60k income does not qualify for a $220,000 home. do the math.

Hi, Go through your math with me. I think that a $60k person with reasonable credit would comply and be able to buy a $220,000 house. With no down payment, I cam out with about a $1350 PI which should be very financable. I assumed a 6.25% interest rate, fixed for thirty years.

Atlanta: Saturated market, mortgage fraud fallout has flattened home prices. Atlanta has a saturated 11.2-month supply of homes and condos for sale, up from a 7.2-month inventory in December last year. Atlanta was No. 3 on the list of mortgage fraud hot spots in 2005, the last year for which figures are available, according to the Mortgage Asset Research Institute. http://www.usatoday.com/money/economy/housing/2007-02-12-close-atlanta_x.htm?csp=34

Well if I could sell mine (which was built on a natural spring and water comes in 24-7) I would, However who wants to pay a house payment over. By george at least its paid for. Just have to invest in water pumps and timers every other year. I cannot for the life of me figure out why people build such big houses? Don't they know that heat cost money? And if your not having people in the rooms whats the need? Your right, people are not happy with little and content with what they have. Gotta keep up with the Mr Jones next door. As I tell the kids. You want a champagne life with a koolaid income.

I know all about mortage fraud in Atlanta Ga. I would say it is mostly concentrated in Dekalb county. take a look at the statistics and you will see I am speaking the truth.

The housing market pretty much level off here last year. It looks like things may start picking up again slowly. There is a house down the block that is a dump. It looks comepletely trashed. What the owner is doing is highlighting the positives. It is over 1900 sq. ft. and the back yard is against the golf course. They are asking $639k for it. I'm curious to see what it sells for.

Put it in perspective, for years, millions of Americans have been living beyond income. Credit Cards, People who were high risk were able to get subprime loans. Banks are charging $35.00 "processing fee" for a returned item. Major real estate management companies charge $250.00 and get away with it. We pay more, they raise more, we pay more. What happened to the boycotts of the 60's. You rememember those don't you? The ones where people stood together, did without and demanded positive action. That is the problem in a nutshell. We don't *want* to do without. So, we continue to pay outrageous interest rates, gas prices, rents and our salaries never catch up. I think it is time for two corrections...financial and ethical.

ABC did a story about my family this past week about the housing market and I am disqusted in the way it was done.The whole point in doing the story was to let people who are having problems paying their mortgage due to illness,loss of income,or rising interest rates can get help.There are many non profit organizations out there that will help.It was suppose to show that my family did have difficulty paying our mortgage but we sought help and that we are STILL in our home.They showed nothing about the organization that helped us which i am a firm believer in cuz they helped us tremendously in saving our home.We hear so many negative stories on the news and this was suppose to be a positive story and to let people know there is help out there. Please let ABC know how you feel about this.It's not right

The housing market is not falling, it is busines 101, when you run low on customers (ones who can afford), you create sales, (programs) where you can grow your base. And now we have (Clean Up In Isle 5), the industry has turned its head as everyone one wanted to jump into the mortgage industry over the past 10 years and in doing so created (sales) programs that put (buyers, Refi Clients ) into programs they really did not qualify for. And why, to keep there numbers up, create new growth and lastly to get paid. Everyone in the industry from the head of the large investor down to the real estate agent are to blame. It did not matter the sale had defective items, lets push the product out the door and get paid. Humm... being in the industy for 11 years, I know first hand.

The housing market is not falling, it is busines 101, when you run low on customers (ones who can afford), you create sales, (programs) where you can grow your base. And now we have (Clean Up In Isle 5), the industry has turned its head as everyone one wanted to jump into the mortgage industry over the past 10 years and in doing so created (sales) programs that put (buyers, Refi Clients ) into programs they really did not qualify for. And why, to keep there numbers up, create new growth and lastly to get paid. Everyone in the industry from the head of the large investor down to the real estate agent are to blame. It did not matter the sale had defective items, lets push the product out the door and get paid. Humm... being in the industy for 11 years, I know first hand. ******************************************** what happens now to the people who really didn't qualify but still got the loan?

If interest rates stay low, perhaps it will return to business as usual, but combining the drop in the dollar with inflation could send interest rate upward. What would happen to the prices of houses with a 10% or 12% interest rate for new purchases, or a variable loan?

Take a look at 1981-1983. Bascially the market slowed a lot, and people that we desparate sold at losses. People that held and did not sell did just fine.

Do you think interest rates had anything to do with what happened in the 70s & 80s? As they were going up, housing prices fell. It was when they were coming back down that housing started recovering. As I said, if interest rates stay low all will be hunky dory, but if not housing prices will probably suffer again.

Buyers are qualified on the basis of the ratio of their income to the house payment. As interest rates rise, the value of the house has to adjust downward if it is going to be sold short term. At a 12% interest rate, the payment is close to twice as much on a mortgage of a comparable amount today. Regards, Jim

The "bull market" was driven as much by interest rates declining, as it was the value of stocks increasing. Over time, the return "inside companies" stays constant. THe last time that I looked at it (some time ago) it was about 14%. When interest rates are at 4%, and the stock has an interal return of 14%, the stock sells at a big premium (let's say at 18 times earnings). When interest rates rose in the early 1980's, bonds were yielding close to 14%, so stocks sold at a lot lower value, about5-7 times earnings. Housing is another matter. Unlike stocks, you can take them or leave them. Housing has a shelter value that is going to protect it, and as the dollar falls, international investors wil start buying up the U.S. housing stock in the beter places.

I am curious to know what % of their home does a typical American own. That's without any loan leveraged to their homes. From what I understand Americans can write off any interest payments on mortgages. So you posters out there...be honest...what percent of your home do you own? I live in Canada and we can not write off interest on our primary residence therefore most people try to pay off their homes as quick as possible. I own about 70% of my home and I am looking to have it paid off in about 4 years.

It's dangerous now a days to have a mortgage free home. There is always someone out there to loot the equity in a home. Loans for cars and education, reverse mortgages on homes ,credit card debt. Spain has $50,000 down to buy a home for young people. We used to have $50,000 down for vets. Today it's pump and dump the house and knock it down. No such thing as title insurance just tsunami, aka tidal waves..I once answered a newspaper ad for a contractor for a quote on storm windows. Looking to follow-up with an e-mail, I learned he was an attorney going from room to room and he didn't even tell me! Hasta luego.