The American Empire is Burning:Pull up a chair.

Although I’m sure that, like I, many of you are not at all surprised by the extent of the financial crisis we have seen to date, I’m absolutely certain that most of you are shocked by the extent government’s response.

This decline was inevitable… it was obvious and for years many have taken to writing/blogging and debating it’s various details but could anyone have ever predicted that as a result of this ugly episode the federal government would violate our economic and social system to such an extent?

I know I didn’t… I now see that I was naive.

In anticipation of the decline I had envisioned the outcome many times… Americans tightening belts, losing their jobs and then their homes, increases in crime, a “poverty effect” that would reverse most of our gains from the nineties leaving the country trapped in a vicious-circle pushing us into a long and deep recession always teetering on the brink of depression.

Yet… I suppose I should feel foolish admitting this now… I had always expected that households and firms would be largely on their own to navigate the down-side much as they had the up-side of this historic and nearly multi-decade boom.

I say “largely” because our government has, for generations, had at its disposal many well known tools for engaging tough economic times (unemployment insurance, FDIC, fed funds rate, lender of last resort etc. etc.) and although this bout looked to be fairly severe, they seemed to me to be adequate.

Never did I EVER expect that the federal government would force American taxpayers, and their many generations of descendants, to essentially be the sole bearers of this epic catastrophe.

It doesn’t matter if you were prudent, if you planned, if you resisted reckless behavior or were even thrown to the side, unable to keep up with all the mayhem.

You will now PAY for the aftermath.

And if that’s not enough, you’re not simply being drafted to defend our social system by subsidizing the failures of all the individual ignorant greater fools… you are going to be the FINAL greater fool for the WHOLE system itself.

If congress passes the proposed legislation and the president signs it into law (as is likely), all private financial institutions, even foreign institutions will clean their balance sheets of junk mortgages, credit card debt, car loans, student loans and other nearly worthless assets on the back of your labor.

I want to repeat a point that I made in a prior post.

Many of these private institutions are THE VERY SAME that lobbied hard for sweeping new bankruptcy reforms that now make it harder than ever for individuals to seek shelter during times of personal financial hardship.

If you’re late on your credit card debt, these institutions will hammer you with fees that can, under certain circumstances, eventually exceed the debt itself… if you default they will ultimately sell that debt to a collector that will stop at NOTHING to squeeze you for every last penny.

This bailout scheme will create a massive multi-generational transfer of wealth from the many average American households and firms to the very few wealthy, elite and well connected.

Let’s remember that these actions are coming at a time when our stock markets have declined less than 25% from their prior peaks and absolutely NOT in the context of a calamitous depression.

This is an absolute disgrace and I’m convinced that no other generation before us would have ever conceived of this level of cynical tyranny.

There is no liberty… you are not free… America is truly a collapsing empire with only hollow ideals and empty slogans left to remind us of our once proud ambitions. Don't believe me? Our dollar is down 6% since last Thursday vs the EURO. That is an enormous move in the currency markets. Foreigners don't like what they see, neither should you.

GOVT In Action: Jumbo Fixed Rates Drop

Mortgage rates dipped over the past few days as investors shunned stocks and purchased mortgage securities backed by the federal government and solid prime jumbo loans.
Borrowers with good credit and a 20% down payment today could qualify for a 30-year fixed-rate mortgage at 5.50% with a one-point fee. That’s down from 6.00% on Friday of last week.
The rate has been trending downward from 6% since the government took possession of mortgage buyers Fannie Mae and Freddie Mac on Sept. 7. Investors now feel comfortable buying those companies’ mortgage securities, and that lowers rates to consumers. The move by the US government has had the needed impact. If you can't save housing you can't save the financial system nor the economy from a financial meltdown/great depression scenario.

However, adjustable rates have improved much more. Bloomberg reports that the international rate banks charge each other for overnight loans, known as the London Interbank Offered Rate or LIBOR, more than doubled and then moved lower as the FED and European Central Bank moved to inject money moving rates to 2.95% as markets were spooked by the bankruptcy Monday of Lehman Brothers and the death rattle of AIG. The meltdown of household names is the best opportunity for people to refinance or purchase as investors want something safe/secure. Nothing is safer in this market than solid credit client's looking for a phenomenal jumbo mortgage rate.

About 6 million U.S. mortgages, including almost all subprime home loans and 41 percent of prime ARMs, are linked to LIBOR, according to First American CoreLogic, Bloomberg reported.

Avoiding the Jumbo Mortgage Man

How do you avoid paying jumbo mortgage rates on a jumbo-sized mortgage?

You avoid taking your mortgage to a Wall Street lender, that's how.

It's pretty simple when we break it down.

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The word "jumbo" is a Wall Street-specific term for home loans larger than $417,000. In certain "high-cost" areas, the number is $729,750.

Lately, rates on jumbo mortgages have been terrible compared to its cousin, the conforming mortgage. Plus, jumbo mortgages carry higher loan fees.

The price disparity is even worse for so-called "Super Jumbo" mortgages. A super jumbo mortgage is similar to a jumbo mortgage, but bigger.

But the thing is, the terms "jumbo mortgage" and "super jumbo mortgage" -- these are conventions of a Wall Street-bound loan. Just because your loan size is over $417,000 doesn't mean that you have be subject to the jumbo and super-jumbo rules.

To avoid them, just make a choice avoid Wall Street mortgage lenders when your loan size exceeds your local conforming loan limits. This means bypassing your neighborhood Big Bank retail branches in favor of a niche banks that harbor no allegiance to Fannie Mae or Freddie Mac.

Finding banks like this isn't always easy, but it's worth the effort. This is because when a lender makes its own rules, its mortgage rates tend to be lower, its downpayment requirements tend to be smaller, and its underwriting process tends to be smoother.

These are all good things when your mortgage is greater than $417,000.

Consider these mortgage scenarios from a sampling of local banks. Each example carries a corresponding mortgage rate in the low-to-mid 6-percent range:

• $700,000 mortgage with 20 percent down, primary residence


• $1.5 million mortgage with 30 percent down, vacation home


• $2.5 million mortgage with 30 percent down, primary residence

Now, compared to what Wall Street lenders are offering, not only are the small bank rates up to 2 percent lower, but they're not accompanied by discount points, either. And that's even giving Wall Street the benefit of the doubt -- most Big Bank lenders won't hardly touch a jumbo or super jumbo mortgage with a 10-foot pole anymore.

The irony here is that wealthiest Americans often have private banking relationships with firms like Chase, Bank of America, and Citi among others but their private banking relationship is ill-equipped to handle the mortgage needs of a high net worth client anymore.

In 2005, the banks performed admirably for their wealthy clients. Today, not so much.

So, the best way to avoid paying jumbo mortgage rates on a jumbo-sized loan is to get out from Big Bank mentality and get your mortgage funded from somewhere other than Wall Street.

Jumbo mortgage rates are expensive. Niche, local bank mortgage rates are not. If you're a jumbo homeowner and you have a local banking relationship, it may be wise to call your branch to get a better rate quote.

And, if you don't have a local bank to call, know that you can always call or email me. I lend in 42 states and have niche banking relationships in all of them. If you can't find low rates for yourself, I'm happy to find them for you.

Millions of home sellers failed Econ 101?

We are going to keep this simple because millions of people must have failed Econ 101 or missed the month of supply/demand charts and it's influence on prices.

If you had a car dealership full of cars that weren't selling what do you do?Hey maybe have an enormous sale:

This is the current for sale inventory of existing single family homes in the U.S.:

from our friends at Calculated Risk.

Maybe the millions of sellers should pore a huge cup of coffee and wake up to today's market. But, who am I to judge that asking prices are too high? Maybe these sellers are aware of 5 million wealthy Asian and Arab buyers that are dying to move in and pay full sticker price. Sure and Santa Clause hangs out with the tooth fairy in the Cayman Islands during August summer break.

The way this standoff resolves itself is with declining prices to meet the available buyers or staying stuborn and waiting for the market to rise up to the current asking prices. Homes are selling every day... that are priced right. And now for a laugh from my favorite newspaper comic when I was a kid. Calvin and Hobbes.

Larger Version of comic.

Converting Your Primary to Investment Property: You may not qualify.

When a homeowner buys a new home, he has 3 options of what to do with his current residence:

1. Sell the home, paying off the mortgage in full
   
2. Keep the home as a second/vacation home
   
3. Convert the home to an investment property

The most common action plan is the first one -- sell the home and pay off the mortgage. However, with home prices poised to rebound, some savvy homeowners are trying to avoid "selling low".

Unfortunately -- as of August 1, 2008 -- waiting out the market won't be so easy.

Burned by foreclosures and wary of risk, Fannie Mae issued new conforming mortgage guidelines that specifically apply to home buyers planning to convert an existing primary residence into a second home or investment property.

Among the highlights of Fannie Mae's Changes:

Selling the primary residence
If the new home being purchased closes prior to the existing home's sale, both payments must be used to qualify the buyer for the new mortgage.

Converting to a second home
If the home has less than 30 percent equity in it, the home buyer must show 6 months of PITI reserves for both properties to qualify for the new mortgage.

Converting to an investment property
If the home has less than 30 percent equity, its rental income may not be used to help the buyer qualify for the new mortgage.

If it seems like mortgage rules are getting strict, that's because they are. And they're expected to get tougher, too. With each foreclosure and high-profile bank collapse, mortgage lenders tighten up their guidelines just a bit, freezing out the "fringe" borrower from access to mortgage money.

Mortgage rates may rise through 2009, or they may fall. We don't know. But what we do know is that borrowing money to buy a home will be tougher.

If you plan to buy a home in the next 12 months, consider moving up your timeframe or -- at least -- planning ahead. Guidelines for jumbo mortgage programs are likely to follow as Fannie/Freddie set the tone for the overall market. Understanding the mortgage rules and how they can change may be the difference between getting approved for a home loan, or getting turned down.

Housing and Recovery Act 2008

Various client's have discussed the housing bill signed into law two weeks ago. Below is a great summary. A few items will have a slight impact on housing. The biggest benefit is for borrowers that are in danger of foreclosing and first time home buyers. The FHA created a program which is a loan write down and shared equity participation with Uncle Sam for 50% of the future appreciation. My first economics teacher Dr.Lamb burned into our brains, that there is no such thing as a free lunch. Various elements of this bill bear that out. The bill is not sexy so I had to throw in a picture of Heidi Klum to liven things up. Enjoy your weekend.-Mr.Mortgage

Key provisions of the Act include:

New agency created to regulate Fannie Mae, Freddie Mac, and the Federal Home Loan Banks: The Act creates a new regulatory agency, called the Federal Housing Finance Agency, to oversee and regulate Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. The agency is charged with the responsibility of monitoring the portfolio holdings of the entities it oversees and ensuring they maintain sufficient capital to operate healthy national housing finance markets.

FHA Program updated: Effective January 1, 2009, the FHA loan limit for conforming loans increases to as much as $625,500 in the most expensive U.S. markets. This affects both home equity conversion mortgages (reverse mortgages) and jumbo loans. Down payment requirements on FHA loans increase from 3 percent to 3.5 percent.

The Hope for Homeowners Program: The Act creates a new Federal Housing Authority (FHA) program designed to help borrowers in danger of losing their homes to foreclosure. Eligible homeowners may be able to pay off their original (foreclosing) lenders with a fixed-rate, 30-year-term mortgage for up to 90 percent of the appraised value of the property. Eligible homeowners are those who originated their loans before January 1, 2008, spend more than 31 percent of their monthly income on their mortgage, and are currently in danger of foreclosure. Borrowers would have to share future equity with the FHA. The program is completely voluntary; banks may elect not to participate. The program begins on October 1, 2008 and ends in September of 2011.

Temporary mortgage foreclosure protection for servicemembers: The Act provides mortgage foreclosure protection for members of the U.S. Armed Services by temporarily increasing (through December 31, 2008) the maximum loan guarantee for VA loans. The period a lender must wait before initiating foreclosure proceedings after a service member returns from service is extended from 90 days to 9 months. Increases in mortgage interest rates above 6 percent are suspended during the period of service and for one year after a service member ends service. This provision will sunset on January 1, 2011.

Temporary tax "credit" for first-time homebuyers: First-time homebuyers of a principal residence purchased after April 8, 2008 and before July 1, 2009 may take a refundable tax credit of 10 percent (up to a maximum of $7,500; $3,750 for married persons filing separate returns) of the purchase price of the property. The credit is phased out for individual taxpayers with adjusted gross incomes (AGIs) ranging from $75,000 to $95,000 ($150,000 to $170,000 if married filing jointly). However, taxpayers must repay the credit taken over 15 years in equal installments as a surcharge on their annual income tax return.

Temporary standard property tax deduction for non-itemizers: For 2008 only, taxpayers who do not itemize their deductions will be allowed to take a real property tax standard deduction (in addition to the standard deduction) of up to $1,000 if married filing jointly ($500 for all other filers).

Reduced homesale exclusion for nonqualified use: For sales and exchanges of a principal residence after December 31, 2008, the $250,000 ($500,000 if married filing jointly) homesale exclusion won't apply to the extent the gain is allocated to periods (not including any period before January 1, 2009) during which the property is not used as the principal residence of the taxpayer or the taxpayer's spouse.

Temporary increase in low-income housing credit: For 2008 and 2009 only, the Act provides a 20 cent increase in the low-income housing credit per-resident cap, and increases the small state minimum by 10 percent. The technical rules relating to the credit have also been simplified.

Expansion of the rehabilitation tax credit: The Act taxpayers to qualify for the full amount of the rehabilitation credit so long as less than 50 percent (up from 35 percent) of the rehabilitated building is leased to state and local governments or other tax-exempt entities.

Repeal of AMT limitations: on tax-exempt housing bonds, low-income housing credit, and rehabilitation tax credit. Generally effective after December 31, 2007, interest on tax-exempt housing bonds are not subject to the alternative minimum tax (AMT), and the low-income housing credit and rehabilitation tax credit can be used to offset AMT liability.

REIT modernization: The Act liberalizes the rules for real estate investment trusts (REITs) by clarifying that they can earn foreign currency income associated with real estate activities, increasing the permissible size of REIT investments in taxable REIT subsidiaries, modifying the REIT safe harbor for dealer sales, and extending the special rules for lodging facilities to health care facilities.

Election to accelerate recognition of historic AMT/R&D credits: The Act allows taxpayers to elect to accelerate the recognition of a portion of their historic AMT or research and development (R&D) credits in lieu of the bonus depreciation tax benefit allowed under the Economic Stimulus Act of 2008. The amount taxpayers can receive is calculated based on the amount invested in property that would otherwise qualify for said bonus depreciation. This amount is capped at the lesser of 6 percent of historic AMT and R&D credits or $30 million.

Huge Impact on 2nd homes and Investment Properties

Conforming mortgage guidelines are the Home Loan Rule Book, delineating between applicants that approved for a mortgage and those that do not.

Effective today, the rule book just got a little bit tougher.

According to Fannie Mae, homeowners converting their primary residence into a second home or investment property will be subject to additional underwriting scrutiny. Fannie Mae is leery of lending to people that may be over-extended.

The complete underwriting update is available at the Fannie Mae Web site but some of the more important points are summarized below, divided into Second Home and Investment Property.

Second Home Guideline Changes

• Without 30 percent equity in the second home, mortgage applicants must have 6 months worth of PITI reserves for both properties in their bank accounts.


• With 30 percent equity, the PITI reserve can be reduced to 2 months.

Previously, there was no minimum reserve requirement.

Investment Property Guideline Changes

• With 30 percent equity in an investment property, 75% of the monthly rental income can be applied toward the applicant's monthly household income.


• Without 30 percent equity, rental income may not be applied to the applicant's monthly household income and 6 months PITI is required for both properties.

Previously, 75% of the rental income was allowable regardless of equity, and minimum reserve requirements were 2 months.

Even though just a small percentage of Americans own second homes or investment properties, the conforming mortgage guideline changes impacts homeowners everywhere.

This is because more restrictive guidlines lead to two separate, but concurrent, outcomes:

1. The demand for homes reduces because fewer buyers qualify for mortgages


2. The supply of homes increases because fewer sellers can refinance into more affordable home loan

Less demand and more supply places downward pressure on home prices.

Now, remember that mortgage guidelines continuously evolve and what's accurate as August 1, 2008, may not be accurate six months down the road. In other words, confirm what you're reading about mortgages online with your loan officer before making any real estate-related decisions.

Looking Back and Looking Ahead

On the wave of a two-day rally, mortgage rates improved last week overall. This despite a Friday reversal that had caused rates to tick higher just before weekend house-hunting began.
And, like so many other weeks this year, last week's mortgage market activity was defined by its quick-moving interest rates. At least one major mortgage lender issued 11 separate rates sheets between -- an average of more than 2 per day. Now, as an active mortgage rate shopper, you can't predict mortgage rate volatility but you can be prepared for it.
Start by knowing which mortgage product is the best fit for your long- and short-term financial goals and then be ready to pounce on a "good rate" because the rates expire as soon as that next rate sheet gets issued.

Another effective way to prepare for shopping is to watch for data that can influence the market's opinion of the U.S. economy. This week, there's a lot of it --starting with Tuesday's Consumer Confidence report. When confidence levels are high, economists expect Americans to spend more, propelling the economy forward towards inflation. Inflation makes mortgage rates rise.

Then, on Thursday, the Employment Cost Index data is released. This will be a closely-watched figure this month because it should show if American workers are pressuring employers for raises in light of higher gas and food prices. If wages are up, it will be considered inflationary because businesses eventually pass that cost back to consumers.

Again, bad for mortgage rates. And lastly, on Friday, the jobs report will be released. American businesses have shed jobs in each of the last 6 months, and June is expected to show the same. The jobs report's influence on mortgage rates is enormous so expect big rate swings Friday, either up or down.

Overall this week, considering the weight of the data, it may be prudent to finish-up rate shopping as soon as possible and get locked in with your lender. As the week progresses and the data's import grows, the markets should get less and less stable.

Jumbo Mortgage rates for July 29, 2008. Loan amounts up to $2,000,000:
3/1 ARM 5.875%
5/1 ARM 6.25%
7/1 ARM 6.50%
10/1 ARM 7.75%
30 Yr Fixed 7.875%

All rates offered to the borrower with 1 point cost. Rate quotes assume an owner occupied purchase transaction with a 25% down payment, 720 credit score, full income qualification and 12 months of verified reserves. Rates are subject to fluctuation. Custom jumbo loan rate quotes and rate lock advice are available by visiting www.thegreatloan.com

MORTGAGE RATE TREND:
Next 7 days: Slightly Lower
Next 30 days: Flat
Next 3 months: Higher

Fannie and Freddie Baked in the Cake

Jumbo Mortgage markets have turned their attention back to the U.S. economy this morning, causing yesterday's rate improvements to unwind a bit.
Rates had fallen Monday after the Federal Reserve and U.S. Treasury's joint announcement in support of Fannie Mae and Freddie Mac. Today, it's the data that is taking center stage.
Most notably, the U.S. Dollar is trading at an all-time low versus the Euro and other currencies.
This is a negative for active home buyers because American homeowners repay their mortgage interest in U.S. dollars. When the dollar loses value, so does the value of those interest payments so mortgage rates end up increasing in order to attract new investors.
Another reason why mortgage rates are higher this morning is that June's Producer Price Index registered much higher than was expected, posting its largest one-month gain since November 2007.
PPI is a lot like the Cost of Living index, except that it measures operating costs for businesses instead. When business costs are increasing, they are often passed onto consumers and this is why rising PPI is thought to be inflationary and inflation -- like a weakening dollar -- pressures mortgage rates to rise.
So, while Monday's rate improvements haven't completely erased, today's action reminds us that mortgage markets wait for no one and yesterday's mortgage rates rarely carry forward.
Especially when inflation is in the mix. Did you buy bread or gas this week? I did. Inflation is alive and killing our purchasing power.

When the Power Goes Out and Other Lessons.

In part of Los Angeles and Orange County we had a power outage that lasted about two hours this afternoon. This isn't Iraq where 40% of the time they have power failures. This is a rare event but it reminded me of the world and people we depend on to go about our daily lives.

Today's home owner or home buyer is experiencing the same level of surprise when they try to get a mortgage loan. Make no mistake about it THIS IS NOT A PROBLEM FOR OTHER PEOPLE. If you are thinking about selling, your buyer has to put 10-20% down now or take a high rate on an FHA loan with a big monthly mortgage insurance payment. It was 0% down two years ago with so-so credit. If you are thinking about refinancing now or some point when you can find the time. Do it now! If you don't have the equity or are 1 point shy on the FICO you are out of luck and stuck with your current loan.

I kid you not, it all matters. The rampant inflation has caused rates to move into the low 6% range on 5 and 7Y ARMs for the most qualified clients with plenty of equity. This is a shock to people that borrowed during the 02-05 period when rates were the lowest level in 50 years. Most of these client's are coming out of 5% rates on adjustables. These adjust against the LIBOR which is now 3.20%. Almost every Prime perfect credit ARM is 2.50% plus the LIBOR index. If you were adjusting today your rate would be 5.70%, not bad but look at this chart and do the math:

Rates move back to the 2006 or 2007 levels and you are at 7-8%+. In order to stop inflation central banks(i.e. the FED) raise rates. Don't be shocked to see HELOCs at 8% in two years and LIBOR at 6%. Why should a person put money in a CD at 3% when inflation is really 5-7%. Do you buy gas or food? Enough said. Rates will go higher to compensate.

Welcome to the new reality of a weak dollar, high inflation, and falling home values. No area in the country is immune to these forces. These winds have a dramatic impact on the loans available even to the most stellar money good borrowers. The new standard for jumbo loans is to have 20% equity minimum. This is for loans that are above the new Fannie Mae "conforming jumbo" limits which differ by area. In most high cost markets it is 729k. Do you have the equity to refinance? Are you close to not having 20% equity in your home? If not you can't refinance unless you bring a check to the table if you are in the jumbo loan market. Otherwise you can have 5-10% equity but now you have to carry mortgage insurance which can run a few hundred hard earned dollars a month.

If you want to check your home value go to realtor.com or redfin.com. Search for a home just like yours. Find similar homes and then find the lowest priced comparable. That is the market. Banks are looking at the lowest comparable home now because it is a falling market. This is called deflation. Home values are deflating like a balloon with a hole in it.

We have seen dozens of client's this month that can't refinance because they don't have the required equity. Their next move is usually to put their home on the market or sit tight and pray to the interest rate gods that their mortgage payment doesn't adjust too high. Don't gamble with your most valuable financial asset and largest liability. Pay attention to your risks and work to get the best possible loan for your situation. If you don't work with our firm, please work with someone competent. Take care and have a great weekend. The American Dream isn't dead we are just having a nightmare scenario. It will pass.

Not out of the Woods.

UCLA’s Anderson school of business reported that they see the first flicker light at the end of the housing collapse in California, citing year-over-year transaction increases in areas like Riverside (one of the hardest hit by the bubble). To me this just smacks of analysts wanting to be the first to call bottom without consideration to the underlying fundamentals of the California market.
The two most important of which are the fact that a majority of the loans in the more expensive markets were made with a combination of stated (a/k/a fake) income and exotic loan products like option arms and interest only loans that have yet to recast or adjust. How can anyone call for a bottom and say that foreclosures will ease in 2009 with a clear wave of resets looming on the horizon for 2009-2012 that are actually more severe in nature than ARM resets? That’s irresponsible.
An option ARM reset can increase the monthly payment requirement of a borrower 4-5 fold. With no equity to refinance these homes are going to go cascading in to foreclosure further hurting the market. Any one that does not take this eventuality as a serious threat to the market is just plain ignorant. It’s going to be messy.
See the graph and you tell me if we’re out of the woods yet. As an anecdotal story I had a specuvestor call my office seeking a 5% down NEGAM for a 1.4 million dollar home in Westwood that he thought was a bargain because it was reduced from 1.7 million.

It won't be done until 2012. All the 10's of billions of pick-a-pay time bomb loans haven't reset to fully amortizing yet. As a sign that it was a poisonous product WAMU(the 2nd biggest lender in this area) announced yesterday that they will no longer offer this product. Maybe the smart money crowd knows something the specuvestors don't about real estate and the $34B worth of NEGAMs WAMU has on the books. I will let these charts speak for themselves:

Buy vs Rent:Long Time Renter Takes The Plunge

From a recent client discussion:

"The case for renting has been simple enough. House prices rose so high in the first half of this decade that you could often get more for your money by renting. You could also avoid having a large part of your net worth tied up in a speculative bubble. All this time, I have been a renter myself, ... [but] the housing market has, obviously, changed quite a bit since our last move, in 2005....This month, we found a house that we really liked, and we made an offer. It was accepted.I’m still not sure how good our timing was. Based on the backlog of houses on the market, I fully expect that our new house will be worth less in six months than it is today. ...In fact, if you’re now renting - almost anywhere - and do not need to move, I’d probably recommend that you wait to buy. The market is still coming your way. But it’s O.K. with me if our timing wasn’t perfect.
Leonhardt isn't buying for appreciation, and he realizes the price will probably still decline further. He is buying because prices have fallen enough that the intangibles of homeownership (as he and his wife value them) outweigh the extra costs of owning a home compared to renting."