Day after day, there has been something in the news mentioning the housing market. But why is it so important and how does it affect us as college students?
If you haven't heard, the U.S. housing market has dramatically declined. The good news is that the cost to buy a house is now far below the actual value. If you can get financing, now is a great time to buy your first home.
However, the subprime lending crisis has made it more difficult for first-time homebuyers to get a loan.
Here's what has happened with adjustable rate mortgages: 1.) Banks want you to buy a house; it's more money for them. So, they offer you a loan with really low rates...for now. 2.) You buy the house and start making minimum payments. 3.) Then, the easy lending strategies come into play when your rates increase. You can no longer afford the house or mortgage payment.
What happens next? Your house is foreclosed and you are left with nothing. The companies that bought your payment in stock are also down and out. This affects other countries' economies, as well as our own in the U.S.
In the top 10 metropolitan cities the market is down 10 percent in the last year, according to MSNBC.com,
Currently the Senate is struggling to make a plan for this mess; all they have done so far is make things worse. Many of the bills they have passed, or are trying to pass, have yet to produce results.
Both the Senate and House have attempted tax breaks for real-estate-related companies. They have handed out stimulus checks to individuals and couples, ranging from $300 to $1,200, depending on annual income, dependence status and whether or not the individual has paid income.
The stimulus checks are meant for to be spent freely and, according to MSNBC.com, will put nearly $150 billion back into the economy.
In actuality, most families will be using it to pay off a credit card or make a mortgage payment, reports MSNBC.com. Although the federal government has stepped in to protect consumers, we're a long ways off from recovery.
Something needs to be done about the recession we are headed toward, before we have another decline similar to the Great Depression. t&c;
JESSICA MILLER IS A FRESHMAN ORG. COMM. AND PUBLIC RELATIONS MAJOR AND STAFF WRITER FOR THE t&c.;
ADDITIONAL COMMENTS BY ALEXA LIBERT, JUNIOR JOURNALISM MAJOR AND OPINION EDITOR FOR THE t&c.;
