This is a very depressing article about the home crisis we still are in.
New research suggests that when a home’s value falls below 75 percent of the amount owed on the mortgage, the owner starts to think hard about walking away, even if he or she has the money to keep paying.
It is hard for the real estate market to recover especially when the consumer confidence is quite low at the moment.
ReplyDeleteThere are a lot of article here claiming that the unemployment rate still remain very high. I wonder how people can have confidence to invest a huge amount of money in this market right now. I think this market will recover very slowly.
People who bought house right before the market crash surely suffered lots of lost.
I find one of the most interesting aspects of this story the moral one. I read a really good article (I cannot remember whether from this blog or not) discussing how there is a disconnect between what is considered "moral" for an individual and what is considered "the market" for a business. In the most classical of economics morals never seem to play a role, and in part I believe the disconnect between individuals and businesses in terms of expectations must be rectified in order to have a more honest economy. Whether to make this a change in the counterproductive morality of individuals or the ruthless market orientation of banks is an important question for our economy right now.
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