Middle Class And First Homes

[Jun 12, 2008.]

The housing market is being none to kind to the middle class families. These families were the ones to buy homes during the housing boom that lasted from 2001 to 2005.

As the mortgage collapse took effect these families were also the ones to feel the worse of the impact. Now, as a new group of families start to enter into the middle class they find that buying their first home to be harder then ever before.

This fact is not due to the middle class making less then previous generations but because mortgages and loans are becoming harder and harder to locate. This is thanks, in large part to the current credit crunch which has affected all areas of the economy.

Even with home prices reaching all time lows, families are still unable to comfortably afford their first home.

This comes as a devastating blow to those middle class families who so desperately want to achieve the American Dream. Currently, families can afford rent, groceries, insurance, and bills which leaves very little for savings.

There are in fact, several factors that make the American dream just that, a dream. Rising fuel and energy prices, a weakening credit industry, and the risk for inflation are all making it impossible for the middle class to purchase a home.

In an effort to combat this, families are resorting to high interest loans and mortgages that are sure to reset at a higher interest rate. The result of this will be foreclosure and a strong possibility of bankruptcy.

Middle class families need to realize the change of the times and adjust what they feel is the American dream.

Living beyond your means is certainly not a viable solution to this problem since many feel that the reliance on credit cards has helped to entrench the economy in the current quagmire.

Recent News:

P2P Sites Can Formalize Personal Loans Between Family Members
Last week we looked at how regulators are taking more notice of how peer-to-peer (P2P) lending online is allowing people who need personal loans to get the funds they need without using banks. Even people who plan to borrow money from family members can benefit from using a site like Virgin Money to structure their personal [...]
[January 6th, 2009]
Retirees Look For Alternatives To Home Equity
In a recent MSNBC.com article, options are laid out for Americans nearing retirement who planned to tap their home’s equity to get them through their golden years. Many Americans have recently found themselves changing retirement plans after losing a substantial amount of home equity as the housing market and the overall U.S. economy struggle. These folks [...]
[January 6th, 2009]
Feds to buy $500 billion in mortgage backed securities
Mortgage Interest Rates Dropped Towards the end of November 2008 the Federal Reserve announced they would buy $500 billion in mortgage backed securities and another $100 billion in corporate debt issued by Fannie Mae and Freddie Mac. When they initially made the announcement, mortgage interest rates dropped quickly and considerably. Markets Price Ahead of News As usually happens, [...]
[January 5th, 2009]
Four Things You Need To Know About The Tax Deductions On Your Home Equity Loan
One of the benefits of owning a home is that you can save money on your taxes by claiming deductions on the interest you pay on your mortgage. With a second mortgage or home equity loan, you can still take advantage of these tax breaks but the process can be a bit more confusing. Although [...]
[January 5th, 2009]
Federal Reserve Begins Buying Mortgage-Backed Securities
The Federal Reserve Bank of New York began buying mortgage-backed securities (MBS) guaranteed by Fannie Mae and Freddie Mac today. The goal is to help capitalize financial institutions so they can begin lending again while also driving down the cost of borrowing to help stimulate the housing market. The program, initially announced Nov. 25, allows the [...]
[January 5th, 2009]

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