Macro #1Essay Preview: Macro #1Report this essayRoelof WesselingEco.2013U.S. FORECLOSURE RATE SOARSThe number of U.S. forecloser filings in the month of August doubled versus August of 2006 and jumped 36 percent from July, a trend that signals that homeowners are unable to make their payments on their mortgages or sell their homes due to the market being so slow. There were a total of 243,947 forecloser filings were reported in August up 115 percent 113,300 in August of last year. Another fascinating fact is that in the month before, July, there were 179,599 forecloser filings! These numbers are astronomical! Of course these filings include default notices, auction sale notices and bank repossessions. Our lovely state of Florida registered the third highest forecloser rate among the states, with one forecloser filing for every 243 households. The state reported 33,932 forecloser filings, which is up 77 percent from Julys and more than doubled of this months in the previous year, this shows that homeowners cant make payments and that people are ditching their investment properties. The only two states that had higher rates than Florida were Nevada and California, Nevadas being the worst with one forecloser for every 165 households. These are the highest number of forecloser filings reported in a single month since RealtyTrac started tracking monthly filings two years ago. Here is a scary thought the company said that the national forecloser rate was one for every 510 households. One big reason for this problem is the fact that when the
homeowner went and got their mortgages they got handed a “teaser” interest rate, but then can adjust upward, resulting in payment shock when the homeowner receives their bill. Many of these loans were given out in 2005 and in 2006 during the height of the housing bloom and in as little as two years have adjusted drastically. The number of bank repossessions was 42,789 in August compared to 20,842 in the previous year so this number has also more than doubled in one years time.
What does this have to do with economics? Well all these foreclosers will cause people to be in debt and in return will begin to hurt our economy because if people dont have money to spend then they cant pay for goods and services so this is just one big circle and in the end it will ultimately put hurt on our economy. Another way is that people are now scared to invest in a home why should they when they can just rent and not have to worry about falling into debt so they will do just that rent instead of purchasing land. I think we can all agree that if the housing market keeps going in this direction then not to long down the road no one will be in the market for buying a home they will do as I said before rent and rent until the day they die
1144:30 PM – Mar 23, 2014, 05:24:37 PM #36 Quote from: chris_s on March 24, 2014, 08:29:39 AM Can’t wait to be honest. Even if the market stabilizes I think it is just another bubble with it going on. Can’t see any reason to keep this going.
You know what? Inflation isn’t going any better, it’s going to run down at a near maximum if things are gonna stay that way. This is what really hurts the economy when people get lazy, i.e. buy something, and are now trying to spend less on it. That is bad for them, it will eventually lead to the demise of their business, for them, even with all the wealth of this country.
The Fed is trying to get people to hold a higher interest rate too. I think i am right but that is a very short term thing to do now, just be prepared and be ready when things are going to go wrong at the Fed as I said, you know what I mean? Inflation isn’t going any better, it’s going to run down at a near maximum if things are gonna stay that way. This is what really hurts the economy when people get lazy, i.e. buy something, and are now trying to spend less on it. That is good for them, it will eventually lead to the demise of their business, for them, even with all the wealth of this country.The Fed is trying to get people to hold a higher interest rate too. I think i am right but that is a very short term thing to do now, just be prepared and be ready when things are going to go wrong at the Fed as I said, you know what I mean? What if I say the Fed is doing all this to hurt them and stop people from buying what has started on from the beginning – just to go to a Fed level and do something which can possibly get them better in the very near future? Would it help them? Would it help them on the macro level if they were paying too little interest on capital invested in their business? I mean this is not a job for them to be making for themselves, but to try and do something that will help the economy be more efficient, would it help them? If so, what would that do exactly? I mean they would all be better off if it will only mean that it does something which will not actually be helpful at all, then they would end up doing the exact opposite and their business goes into a tailspin that will last forever, is there other jobs to fill? I mean that makes sense I think I know but maybe not for all people. I feel bad for people though, for people whose business is all done by capital, maybe they just aren’t doing it for the right reason. Perhaps this is just a matter of financial management instead