For there to be normal recovery in the housing market, Lombardi claims that the number of first-time homebuyers should be increasing. He notes that these homebuyers need to be buying a house to live in, rather than to simply renovate, rent, and flip—not speculation.
In the article “What My Real Estate Agent Showed Me Last Week,” Lombardi reports that first-time homebuyers accounted for 31% of the purchasers in August—compared to 34% in July and 32% in August of 2011.
“If lowering the mortgage rates to boost the housing market was the plan, then it is achieved. But the participation rate of first-time buyers is going the opposite way,” says Lombardi.
Lombardi believes that for there to be a healthy recovery in housing market, first-time buyers need to enter the housing market with borrowing. Instead, he notes that the opposite is happening—many all-cash transactions by investors buying homes to rent them.
Lombardi reasons that the demand in the housing market looks to be increasing, because investor and private equity firms are buying foreclosure homes with cash—then they simply rent the homes for a higher return than they are paying on their invested capital.
“From the looks of it, the ‘bounce’ in the housing market is not very convincing,” concludes Lombardi.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market... before it plunged.
With the track record of the profit Confidential, they are good to listen to.
If it is all fake then what can we trust.
Deanna D&D Taking Out The Trash, LLC