If many look at the housing market as a useful indicator of the health of the economy, we should prepare for another collapse. The Federal Government bribed the American people last year to buy homes and in return receive a tax credit. That tax credit just expired April 30, 2010.
Even though the housing market looked good during 2009 till now, the real estate industry is bracing for the worst. With 2007 and 2009 brutal wave of adjustable rate mortgage, many are anticipating another wave of ARM to reset in 2011 and 2012. Since the tax credit expired at the end of April 2010, the number of home sales closings dropped in May more than 5 percent compared to April. Also, there are reports of a 10 percent drop in home sale closing in May compared to April.
Since we are still in a recession, many homeowners had missed at least one payment on their mortgage this year. During the first quarter of 2010, U.S. banks owned 260,000 foreclosed homes. That is a huge 35 percent increase from the first quarter of 2009. With a quarter of a million homes foreclosed in 2010, there are more people who are unable to pay their mortgage because they are strapped for cash. The American people are experiencing the worst recession because for the first time in American history, more than 40 million Americans are on food stamps.
No matter how the Main Stream Media is trying to portray that the economy is stabilizing, don’t be fooled by propaganda. The overall economy is in bad shape and is getting worse. We still have very high unemployment figures. We are seeing an expansion of the Federal Government and federal jobs. We will never pay back out debt. Our current debt will exceed 100 percent of our GNP. That means we are spending money that we don’t have. If there are people denying we are in a recovery, they are fooling themselves.