Now, that Democrats have something to do with it, you bet the recent Bush tax cuts will be repealed. You bet the investors will come under assault. You bet this will cause interest rates to rise and you bet the housing bubble is about to burst!
I hear you say, "What about the Clinton years? Clinton's a Democrat and interest rates were low, when he was President. The economy was great, then. The stock and housing markets were going full speed ahead, then."
You are s-o-o-o-o right, but remember, the Republican congress along with Clinton/Gore got many international trade laws passed. This made the price of goods lower in the States and that acted to stimulate the economy. Also, remember that the Republicans sent up a bill to Bill that would lower Capital Gains taxes. Clinton, knowing that the economy needed a shot in the arm at the time, signed it. This, too, stimulated the economy and that one-two punch led to the rip roaring economy of the 90's. The point is; almost every Democrat voted against these things.
Now, it is the era of Nancy Pelosi. So, look out capitalism! We have a real socialist on our hands here. If it was up to her, the only money you'd have is the money she'd let you have out of the goodness of her heart. Pelosi and her comrades won't even admit that Bill Clinton was a big reason why we have free international trade today. Go figure, one of the only things Clinton / Gore did that was really very good for the economy and the Democrats want to hide it from you. Why? Because it's easier to gain support of middle class voters by telling them the lie that free trade costs Americans jobs!
In short, with the new congress you should look for higher mortgage rates. That really means higher housing costs with lower equity accumulation. Now, that's a real boon to the middle class! Look for less free trade. That means higher prices on imported goods. Imagine what your computer would cost if it were made in total, in America. One scholarly economist told me that a computer made of American parts would cost $14,000 to $20,000! Now, we're giving the middle class a break! Also, don't forget those "tax breaks for the rich" being repealed. A family of four with a household income of, a very opulent, $60,000 a year, on average, because of the Bush tax cuts, pay less than $4,000 in federal income tax. So, in an attempt to get these rich people to pay their fair share, they will be paying over $9,000 after Nancy and the gang reverse the evil tax cut.
Let's not get started discussing our likelihood of surrendering to the terrorists. This article is about Mortgage rates, housing bubbles, interest rates and the economy in general. That's depressing enough. We'll save the part about weak-kneed foreign policy for another time.
The epicenter of the Great Housing Bubble is located in Irvine, California. One of the primary causes of the bubble was the lowering of lending standards and the extension of credit to people who could not handle the responsibility: Subprime borrowers. The word "subprime" has become indelibly linked to the Great Housing Bubble. It is one of the causal factors that make the bubble unique, and the collapse of subprime is widely regarded as the pin-prick which began the bubble's deflation.
Irvine, California, is the center of the subprime universe. Three of the top ten subprime lenders, New Century, Ameriquest, and Option One, are (or were) headquartered in Irvine. Most subprime lenders have processing offices in Irvine due to the large number of trained personnel living in the area.
Irvine's New Century Financial, formerly the second largest subprime operator, is heralded as the poster child of the bubble. The company name "New Century" implies a new era and a new paradigm. It embodies the fallacious beliefs and ideas that inflated the Great Housing Bubble.
The Great Housing Bubble is a national phenomenon; however, the national statistics soften the extremes and make the rise and fall look less remarkable. In some local markets, the prices changes are truly extraordinary. A fine exemplar of the Great Housing Bubble is Irvine, California. Irvine is a large, master-planned community of over 200,000 residents.
The high incomes of Irvine residents are reflected in the rental rates for properties which are consistently near the highest in the nation. High incomes and rents translate into high real estate prices, even at the bottom of down cycles. When reviewing the properties in Irvine and the price tags attached to them, it is not uncommon for outsiders to believe a decimal point has been misplaced.
House prices began falling in Irvine in 2007, and they have been falling every since. The lessons learned from the Irvine experience are universal.
Both Ed Lathrop & Alex Gwen Thomson are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Ed Lathrop has sinced written about articles on various topics from Wedding Photography, Mortgage and Adware. Ed Lathrop is a successful Real Estate investor. He has developed EzCalculator, a Mortgage Calculator that calculates anything to do with mortgages, shows you how to pay off credit card debt and much more. EzCalculator includes the famous "How to Make $. Ed Lathrop's top article generates over 14800 views. to your Favourites.
Alex Gwen Thomson has sinced written about articles on various topics from Home Management, Income Tax Return and Wrinkles. is the author of The Great Housing Bubble: Why Did House Prices Fall?Learn more and get FREE eBooks at:. Alex Gwen Thomson's top article generates over 673000 views. to your Favourites.