Wednesday, December 12, 2007

A Good Synopsis...

...of how the home market--with sprawl growth patterns as its driver--has placed the U.S. economy is quite a pickle: keep interest rates low so that these houses that couldn't be afforded in the first place aren't foreclosed vs. raise the rates to bring back much needed foreign investment.

Despite its somewhat dramatic title, this article from the Motley Fool does a good job explaining the predicament.

The basic fact is this: many houses will be foreclosed leading many people back to the rental market. Which, ironically, means that some folks may end up renting the very house they once "owned" (though, when you "buy" a house with no down payment and each monthly payment accounts for nearly 100%, well, that's hard to accurately classify as "ownership").