|
COPYRIGHT 2007 Waterloo Courier
Byline: Drew Andersen
Jun. 3--WATERLOO -- There is little doubt the nation is experiencing a housing slump. Tuesday's report by S&P/Case-Shiller revealed first-quarter home prices dropped on a national level for the first time in 16 years.
Banks are blaming mortgage brokers, and mortgage brokers are blaming banks. Nearly everyone is pointing a finger at Federal Reserve Chairman Ben Bernanke for not regulating the mortgage industry.
But has the housing slump extended its reach to the Cedar Valley?
The Waterloo-Cedar Falls housing market took a step backward in the first quarter of 2007, and some of the warning signs of a slump are present. But most area experts agree the dip in the local market is nothing more than a blip on the radar.
Bubble and slump
Housing markets across the country have been reeling since the housing bubble started deflating last year. Home values in some regions of the country soared in 2005, creating the supposed housing bubble -- a gross overvaluation of the price of homes, driven by a variety market forces. With the value of homes so grossly overstated, many expected the bubble to burst, causing the value of homes to rapidly plummet and generally wreaking havoc on the housing industry.
The housing bubble can be attributed partly to predatory lending practices. Individuals with poor credit histories were offered mortgage loans at interest rates much higher than prime. These high-interest mortgages are the now-infamous subprime loans that have been the...
Read the full article for free courtesy of your local library.
|
Bookmark this article
Print this article
Link to this article
Email this article
Digg It!
Add to del.icio.us
RSS
