Image by Getty Images via Daylife
Jeff Nielson
U.S. perma-bulls were once again giddy this morning with the latest reading on “existing home sales” - which spiked to an annualized rate of just over 6 million units. However this comes only days after a piece of much gloomier news, which (naturally) was ignored by the media propaganda-machine.
One in seven U.S. homeowners with a mortgage are either delinquent on their mortgage payments, or already in the foreclosure process. Thus, we are presented with data that more people are buying homes in the U.S. but less people are paying for them. Surely it is evident to even the most obtuse market-observer that it is irrelevant how many people are buying homes if they can't afford to make the mortgage payments.
The U.S. housing market has gone from bubble-and-bust to a game of “musical chairs” where title to properties flips back and forth from “homeowners” to financial institutions – with the “homeowners” unable to make payments on their homes (while they hold title), and the banks refusing to write down these “assets” once they take possession (and this is called a “recovery”).
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