It’s been eight years since the sub-prime mortgage shutdown in 2007. Overall, the market seems to be doing fairly well, and while the U.S. economy may still not be firing on all cylinders, it’s certainly pointed in the right direction. But this belies a dirty little secret: the mortgage industry is still backed by the tax payer. There has been no meaningful injection of capital from private markets back into mortgages, and while Fannie Mae and Freddie Mac paid back the treasury department (i.e., us, the taxpayers) a little over a year ago, they’re currently sitting on precious little capital to back any losses on the $5 trillion on their balance sheets.
Archives for April 2015
Everyone is familiar with the concept of homeownership, but you may be less familiar with the economic indicator, “household formation” — and it’s something to which you should pay attention if you’re not buying or selling right now, but planning to do in the future. As the Wall Street Journal explains, “When the economy stumbles and joblessness rises, more people tend to move in with family or double up with roommates. When the economy expands, the opposite takes place as people strike out on their own.” That’s household formation. Yesterday, Reuters reported the latest figures on homeownership and household formation. Check out the article for better insight into the future of housing prices, housing starts, and rental rates.
You never want to ignore when Amazon enters a new business: and they just have. If you’re looking for home repair, or any other general labor, Amazon may be the place you go in the future. Amazon Home Services is their new offering, covering over 700 different categories, and already live in 40 states. The Search Engine Journal covers in more detail why Amazon may be the next layer in local services: from their Happiness Guarantee to the ability to order products and services at the same time, it looks like they’re about to give Angie’s List a run for their money.