WASHINGTON (AFX) - US economic growth is expected to strengthen and inflation is seen slowing in 2007, but it is still too soon to say rising prices no longer pose a threat to the economy, [Michael Moskow] the President of Federal Reserve Bank of Chicago said today.
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He [Michael Moskow] said that continued weakness in the housing sector is holding back economic growth, but he does not think 'the developments in the housing markets will lead to more general economic weakness.'
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'If firms and workers expect inflation to be high, they will want to compensate by raising prices and wages or building in plans for automatic increases,' he said.
Ya, God forbid firms raise wages, Mr. Moskow! Maybe us worker bees can afford a single family home, you know, that CRAZY American Dream we all have....
Believe it or not, I would like to see a quarter point raise in the rates. I think that will shake out the real estate market. Average hard working Americans cannot afford these prices. There are not enough lawyers and doctors to buy these shoe boxes in Chicago for what they are asking. Not every car is an Aston Martin, nor can you sell every car for Aston Martin prices. Same thing with housing. Sooner or later, they will have to let the everyday people back in. The only way to do that is to lower the prices.
8 comments:
higher rates, increased foreclosures, tightened lending standards, the highest level of home ownership EVER. it's allready over......the sellers just don't know it yet.
Anon Jan. 13, 2007, 4:57 p.m.: I believe you'll find that home ownership levels have been at or near their historical record highs for a couple of years.
For purely selfish reasons, I would love for the 'housing drought' continue in Chicago.
By drought, I obviously don't mean inventory. Anyone who lives here knows that you can't throw a stone without hitting 5 houses for sale. Buyers have dried up. Raise the interest rates a little! Foreclose. Let the ARMS come due. Let's see what happens to these overpriced houses and their greedy sellers. Maybe a a collapse of the Chicago housing market will result in my family finally being able to afford to buy!
yes, but why ?
loose lending standards and govt. programs. most of these people were not financialy responsible enough as evidenced by the high foreclosure rates and trouble in the subprime market. it adds up to fewer qualified buyers and more inventory leading to lower prices.
9:09
amen, brother
Anonymous said...
Anon Jan. 13, 2007, 4:57 p.m.: I believe you'll find that home ownership levels have been at or near their historical record highs for a couple of years.
January 16, 2007 10:14 PM
many of the home bought were 2nd ones for boomers....
hey ! the boomers deserve second homes. why they have been called hippies, feminists, yuppies, dinks, mothers, ceo's, grandmothers and now, in retrospect, hungry locusts who left in their wake a barren landscape that used to support the american dream.
THE END.....that is what they are waiting for!
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