It's a Matter of Perspective

The news keeps talking about a mortgage induced housing crisis.

Some of us have been around long enough to remember a much tougher mortgage market. In the early 80's the street rate for a mortgage was 17%. That's right boys and girls, 17%.

Granted today if you have poor credit or poor income, you can't get a mortgage at 6 or 6.5%. But crisis - NO. How many people with good credit and good jobs couldn't qualify at 17%.

As the evidence mounts, it seems that today's crisis was caused by 2 things. People who bought homes assuming that the market value of their house could only go up even in the short term and lenders who made the same assumption. With a little dose of reality this "irrational exuberance" has come back to haunt.

Makes me glad to be in Central Pennsylvania where we didn't enjoy the "benefit" of flipping house contracts 3 times before the house was built but we're not seeing the get rich quick home pricing collapse either.