RATES RISE AGAIN; BYE BYE BUBBLE

"The fast-rising rates have made homes even more unaffordable for desperate Americans, which means even more sellers are realizing the hard way that their houses are seriously overpriced."


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June 29, 2006 at 03:58 PM


RATES RISE AGAIN; BYE BYE BUBBLE


The Federal Reserve raised interest rates again today [link to biz.yahoo.com] -- the 17th consecutive increase -- in an effort to kill off the housing bubble for good.

Investors were delighted by news of the impending collapse of the American economy; the Dow Jones average immediately jumped up by 80 points.

The 1/4-point increase in the Federal Funds Rate means most mortgage rates will also jump by a quarter percent. The federal rate is now at its highest point in four years.

The fast-rising rates have made homes even more unaffordable for desperate Americans, which means even more sellers are realizing the hard way that their houses are seriously overpriced.

"In the latest evidence, the National Association of Realtors said Tuesday that sales of existing homes fell 6% from January to May. The median priced home in May cost $230,000, up 6% from last year," USA Today reported Wednesday. [link to www.usatoday.com]

Sales of existing homes are down almost 7% as compared to last year.

Of the regional markets most likely to collapse, six of the Top Ten are in California. [link to www.usatoday.com]


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