Thursday, February 16, 2006

Increased Housing Inventory Points To The End of the Housing Bubble

With interest rates starting to come off alltime lows, there is a general sense that the housing bubble is about to burst.

According to a piece at The Daily Reckoning, Home builders are facing declines in new orders, while various markets around the United States are seeing the supply of homes increase from 86.9-149.2% in major markets whild it is up 25% Nationwide.

When combined with the fact that many home owners are now going to face higher mortgage payments, and a longer time to sell their home, you can see how the foundation of the housing boom is begining to errode.

While many people entered the speculative realestate market as an investment, a national savings rate of less than 0 indicates that the cashflow may not be there for many when they are pinched by rising mortgage payments.

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