Stocks Crossing The 13 Week Moving Average <$10.01 Message Board

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Strategies & Market Trends : Stocks Crossing The 13 Week Moving Average <$10.01

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To: Bucky Katt who wrote (12495)	6/23/2003 5:46:00 PM
From: SilasSan	Read Replies (1) of 13094

I'm not sure with whom I'm agreeing or dissenting here. I don't think that low interest rates have as great an impact on the housing market as real demand. Previously I referred to the (California) housing market as a Ponzi scheme and I still believe that in the long run $CREDs have got to come back into line with $USDs. However, my short term (2 years) fears were assuaged somewhat this weekend while channel surfing. I came across some talking heads that were addressing these very issues. One cited a "just-released Harvard study" (I’d love to get that citation) that says that the market is in fact being driven by first-time home buyers drawn from recent immigrants and F1 generations from previous migrations. They said that the demand is really there and that, while low interest rates are enticing by reducing the monthly payment on mortgages, the amount saved there is not as important as the down payment. By and large, if you've had a job and saved some money and you've got a job now, you're going to buy a house as soon as it is practical. Low interest rates have definitely fueled a re-fi boom and certainly have an effect on buying decisions. Also, cheap and easy credit is good for the builders as well. But the current housing market is most likely being driven mostly by real demand. I think that higher and higher down payments (commensurate with price increases) are a larger barrier than monthly payments as long as you've got a job. Lose your job and the dream vaporizes rather quickly though. My wife and I bought in during the Carter credit debacle (interesting story). I remember sweating out the ARM (which was re-invented for the masses then) over cheap macaroni and cheese….

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