Mortgage and Lending with Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 NMLS # 6869

“It is Time to STOP the Negative News”

I’m not sure why the media hasn’t figured out, that they are perpetuating the public’s perception. The more and longer they continue to spread negative information, the longer it will take for the public to think, there is something wrong with the American Dream.


The article below is a perfect example. With a title like “What is Killing the American Dream of Homeownership". The truth, the media has a lot to do with it.  Unfortunately, much of the information is spun in a way to make it sound like gloom and doom. “Enough of this Crap”!


What's Killing the American Dream of Homeownership?

08/17/2011 By: Ryan Schuette Printer Friendly View

Once the star of the American Dream, homeownership has fallen on hard times, a victim of the financial crisis and wary homeowners. With home sales at record lows despite rock-bottom mortgage rates and home prices, some say a country once beholden to the mortgage note is now a nation at the behest of landlords. The story sets up a classic whodunit, begging the question: Who set up homeownership to take the fall?


By all accounts, answering the question about who benefits is obvious. Renters continue to see favorable rates, with second-quarter apartment vacancies plummeting to 5.9 percent, a low unseen since 2006, a Reuters story reported real estate firm Reis Inc. as saying. Add to this a Census Bureau report that found housing starts receding by a seasonally adjusted 1.5-percent annual rate over July, alongside a 7.8-percent rise in multifamily housing – a reflection in rentals – and the death of homeownership in America inches away from simple conjecture.

Reuters quoted a Morgan Stanley report as concluding that the “combination of falling home prices, limited mortgage credit, continued liquidations and better rental options is fundamentally changing the way Americans live,” with the country on the road to “becoming a rentership society.”

Tellingly, existing-home sales remain unseasonably pale, with a July index released by the National Association of Realtors (NAR) revealing a shellacking in single-family home sales, which dropped 0.8 percent in June and lowered home units to 4.77 million at a seasonally adjusted annual rate. Fannie Mae further muddied the whodunit by releasing a study this month that found 53 percent of single-family renters in favor of rentals.

Not that Americans overwhelmingly prefer signing apartment leases to mortgage notes. To the contrary: a New York Times/CBS poll from June unearthed the known fact that Americans still behold homeownership as a central tenet of the American Dream, with about nine in 10 survey respondents affirming the national pastime despite economic angst.

So where are home purchases?

Speaking to MReport for a past story, Maureen Maitland, Standard & Poor’s VP of indices, named names by highlighting the impact from high unemployment, low job creation, and an oversupply of vacant and foreclosed properties.

“People will go out to dinner but they’re not about to make a 30-year commitment,” her colleague, David Blitzer, managing director and chairman of S&P’s index committee, tells MReport.

Walter Molony, a spokesperson for NAR, fingers tight underwriting practices as another suspect culpable for the upswing in rentals.

“The big monkey wrench is tight credit,” he says, citing the above NAR index, which found 16 percent of all contracts falling apart during the underwriting and appraisal processes. “Lenders have only been willing to lend to creditworthy buyers.” He says that unsure lenders prevent the rise of a “stronger housing market.”

He answers the whodunit with a surprise answer about homeownership over the long haul: “The rent-versus-buy equation is tilting toward buyers.”

Sounding the same refrain, a study by real estate Web site Trulia portrayed home prices as definitively lower than rental costs in 50 of the nation’s largest cities. Median price listings fell below average renting costs in 74 percent of the cities, with Las Vegas and Detroit taking top spots for record home affordability numbers.

So if “housing seems affordable, why aren’t people buying?” Maitland asked, reiterating the question at the heart of a homeownership yarn. She described “this group of people that have income, want to buy a house, can afford to buy a house, but credit is so tight that they are no longer able to get what they would like to get.”

Daisy Kong, a spokesperson for Trulia, answers by shining a light on unemployment and foreclosures – the usual suspects – saying these issues keep people away from home purchases even in markets where properties are more affordable than apartments. “Until there is stabilization in the home market, I don’t think we’re going to see a huge influx of people wanting to buy homes,” she says.

Reaching the same conclusion, Molony explains that “it’s been confidence issues holding people back. You have a lot of renters who have been on the sidelines waiting to see prices drop or to feel confident in their own jobs.”

So will more Americans rent or run back to homes once the economic malaise lifts?

“This is not something that can be fixed in a month or two,” Maitland said. “Unfortunately, the housing market is still very weak. It’s going to take awhile” for homeownership to recover.

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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294


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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

Equal Housing Statement: We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing becuase of race, color, religion, sex, handicap, familial status, or national origin.


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Howard and Susan Meyers
The Hudson Company Winnetka and North Shore - Winnetka, IL

Interesting post Joe. 

Negative news has always sold newspapers (If it bleeds, it leads) and all other media, and this is certainly playing a role in consumer confidence, but the current situation is more complex than that.

Qualified buyers have been rewarded in most markets for waiting..prices continue to drop.  It certainly won't happen forever, but so far they have benefited by waiting. 

Potential buyers are viewing the current circumstances as either an incredible opportunity  or "trying to catch a falling kniife". 


Aug 25, 2011 02:05 AM #1
Yvonne Burdette-Van Camp
To Buy and Sell Real Estate, see me at Southwest Missouri Realty - Springfield, MO
"Home"work, I have the Answers!

               The buyers I have been meeting at open houses have not been reading the press, THANK GOODNESS.   However the sellers sure have though.  

               I am with you, get rid of all this blah, blah, blah and talk about these phenomenial deals, and great interest rates.

Aug 25, 2011 02:10 AM #2
Leslie G. Rojohn
MoonDancer Realty - Sylva, NC
GRI, ABR ~ MoonDancer Realty

The media knows full well what they are doing.  They are part of the plan to completely tear the country down via one "crisis" after another until everyone gives up and surrenders all their rights,dreams, hopes, in favor of the "protection" of government turning everything over to privitization and capitalist control.  If you want to read how it's all done read "SHOCK DOCTRINE by Naomi Klein.

Aug 25, 2011 02:46 AM #3
Rick Cignoli
Norcom Mortgage NMLS# 71655 Equal Housing Lender - Avon, CT
Sr. Mortgage Loan Officer

Joe...Saw an article today about a financial advisor warning his young clients that their dream home could drop in value. Wonder if he warned them about the same risk involved in the stocks he sold them.

Aug 25, 2011 02:47 AM #4
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Joe. I agree with you. The only thing we can do is talk truth to clients. They may not immediately gain equity, but buying a home is the only asset I know of that retains itself as something no matter what. You can't live in a stock and you can lose it.

Aug 25, 2011 02:51 AM #5
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Joe, I agree that is why I have been searching for anything that is positive and then blog about it.  But the positive stuff is hard to find, because the media sells more with the negative.

Aug 25, 2011 04:19 AM #6
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

It is our responsibility to do everything humanly possible to challenge all media, that continue the negative talk about real estate and mortgages. It is great to have partners like all of you!

Aug 26, 2011 05:39 AM #7
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