Mortgage Rates Fall as Government Expends Bailout - The Wall Street Journal
Mike Morgan - I'm so sick about hearing about mortgage rates falling, and how this is going to make it all better. The problem is not mortgage rates. In fact, they are at historical lows. The problem is: (1) housing prices that were artificially inflated in the bubble, and remain artificially inflated, and (2) unemployment and underemployment that directly effect what a buyer can afford. Those are two very simple principles, yet The Wall Street Journal, Forbes and The New York Times don't get it. As an owner of a residential real estate business, I see the problems every day. I keep pointing out that the politicians need to take a real estate tour with me. If they spent a week with me in the field, they'd be able to appreciate the magnitude of the problem and what needs to be done. My first mortgage was in 1983 at 14% . . . and I was happy to get it! It is not the mortgage rate but the value of the underlying asset that has created the crisis and that continues to fuel it. One thing we can do that will help get us back on track, is to shut down all home builders. We don't need more new homes, but we're still building. When we had too much wheat, we paid farmers not to plant. I'm not saying pay builders not to build. But I am saying we need to stop providing them with the fuel to keep building homes that continue to bring our markets down.