Mortgage rates are at an all-time low and there is a major housing surplus, so why aren’t consumers buying real estate? Greg Rand, CEO of OwnAmerica.com thinks that government intervention is what’s killing the market.
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“The homebuyer tax credit, another example of government intervention, gave us basically a rush in the spring and now it's giving us a rollercoaster ride,” Rand explained. “The end result of it is that it’s actually damaging consumer confidence, it’s causing everyone to wonder, did anything that happened this year mean anything, or was it all driven by the economy?”
Could the problem be that potential buyers are holding out for the possibility of better rates to come? Rand thinks that this might be true for home buyers, but investors see this as an opportunity. “There’s quietly under the surface right now an investment boon starting to percolate,” Rand said. “The only urgency out there in the housing market right now are those people who have seen the stories about 4 million foreclosures in the pipeline and they see that as basically an alarm bell saying this is the opportunity of a generation to buy an undermarket property.”