Talking about the LIBOR scandal, home price projections from Fitch Ratings and home builder confidence and what it means for buyers…
Is the Game is Rigged?
It certainly is starting to become apparent that the huge banks and financial companies really do not care about rules, laws, ethics or morality. Consider this snippet from Bloomberg:
U.S. homeowners filed a lawsuit against 12 banks, including Barclays Bank Plc and JPMorgan Chase & Co. (JPM), claiming that manipulation of the benchmark Libor lending rate made their mortgage repayments more expensive.
So what is LIBOR and how does this affect you? Well, LIBOR is short for the London interbank offered rate. It is used by banks and other financial institutions to set interest rates. So if these banks made back room deals to manipulate the LIBOR, they were actually finding a way to violate the Sherman Anti Trust Act. The banks are also facing charges they have violated the RICO Act which is normally used to fight organized crime.Let me say that again:
Banks are being charged with the same thing that the government uses to go after organized crime.
The old saying where there is smoke, there is fire just might apply here. Because if you read this blog on a regular basis you will see plenty of stories about banks being caught doing something wrong. Or reprehensible. Or being sued:
And don’t think for a second that the banks using iffy foreclosure paperwork has stopped:
Seems that the banks are going to keep on doing what they do best. Probably has always been this way and probably will not change anytime soon.
Fitch Ratings Says Real Estate Recovery Will Be Stop and Go
Fitch Ratings just said that despite their forecast that US home prices will rise 3.2% in 2012 and 2.5% in 2013, we should keep our “enthusiasm measured”. I have to agree that while we are seeing improvements, there is so much volatility that we may see home prices bounce up and down month-over-month for quite some time. I still think we will see US home prices rise 1-3% over the next 2 years IF the economy does not turn to $#!+.
I would suggest looking at year-over-year changes to get the BIG picture regarding house prices. And always look locally at the most recent data to know what is going on in your neck of the woods!
Rising Confidence is Good News for Real Estate and the Economy
From the National Association of Home Builders:
Builder confidence in the market for newly built, single-family homes edged slightly higher for a sixth consecutive month in October, according to the National Association of Home Builders/Wells Fargo Housing Market Index
Home builders are not stupid. They know that inventory levels of available homes are low. 17.8% fewer homes for sale than the same time last year according to Realtor.com’s September 2012 Real Estate Data
Also builders are seeing more serious buyers.
It really is a great time for some people to buy a home.
Is it a great time for you to buy a home?