Posted by Jonathan J. Miller -Thursday, August 11, 2011, 2:54 PM
I saw this in The Real Deal and felt compelled to comment in their post because the rationale was so utterly ridiculous. This must have been a PR placement segment for the bank.
Yes mortgages are cheap and house prices are low so affordability is at record levels – but banks currently have the tightest mortgage underwriting requirements in decades. Consumers aren’t blind lemmings following the media off a cliff.
Here’s my comment on the blog post:
Seriously, this has to be the lamest reason ever given for a weak housing market. When you run out of reasons, the fall back is to blame the media. With low interest rates and lower housing prices, the crisis of confidence is all about bank underwriting standards. Keeping a 20% down policy has nothing to do with why consumers have low confidence. According to the Fed, residential credit has remained tight, if not tightened. Why? Because unemployment is stuck in the 9’s, Fannie/Freddie are in flux and now the financial markets are volatile. The “crisis of confidence” comes from banking’s about face on mortgage financing. Give the consumer some credit (pun intended) for having some intelligence. Good grief.
“Crisis of confidence” comes from a consumer not being able to get a mortgage or refinance to take advantage of low rates and low prices. Crisis of confidence comes from consumers watching the economic events unfold without any competent leadership, only containing high stakes political brinksmanship.
Let’s say we get past the age old “blame the media for everything” rationale?
Obviously its the blogosphere’s fault.