Why Is This A Bad Thing? New Home Purchases Plunge To Lowest Level Since 2000
I’m thinking this is a positive:
Nov. 12 (Bloomberg)—Mortgage applications to purchase homes in the U.S. plunged last week to the lowest level in almost nine years as Americans waited for the outcome of deliberations to extend a government tax credit.
The Mortgage Bankers Association’s index of applications to buy a house dropped 12 percent in the week ended Nov. 6 to 220.9, the lowest level since Dec. 2000. The group’s refinancing gauge rose 11 percent as interest rates decreased, pushing the overall index up 3.2 percent.
Times of economic uncertainty are hardly good times for Americans to be taking on more debt. Perhaps it makes sense for some people, but generally speaking as a nation we need less debt. Not more debt.
But in Washington DC everyone is always carrying on as if the key to economic recovery is using policy to push people into spending and borrowing more. But that’s madness.
Of course, that’s also their approach to every other problem they’re faced with. Spend more. Borrow more. I guess when all you have is a hammer, everything looks like a nail.
