When we all think of home we all
have a different idea about what a home is. To some of us it is a house sitting
with a yard and maybe a white picket fence to others it could be something like
a sprawling mansion that looks like it came out of the great Gatsby. The
question I have to ask is “is that really our home anymore?” The reason I ask this is because it has
become more and more apparent that the current real estate market has made it
apparent that more and more people don’t actually own the place they call home
like they used too. During the most recent economic crunch that this nation
befell many people who had bought their homes on fluctuating mortgage levels
thinking they were genius’s because they didn’t have to pay as high as those
that had a set rate soon found themselves drowning in a sea of notices
demanding more and more money.
The reason for the sudden demand by
the bank is due to many reasons but namely they had made a few bad choices and
were trying to recover having made the investment into the idea that people
would be able to afford to pay a mortgage payment should it go up rapidly from
say 3% to 10%. Though that may not seem like a lot that amount of money was all
dependent on how much the home was worth and unfortunately people felt they
deserved houses like those of Beverly Hills when they were working at a job
that could barely support a two bedroom apartment a month on wall street in
nyc. So the people who were once thought
to be geniuses were now baffled that they had to pay a lot more money than they
had before because they didn’t realize the interest rate on their mortgage
could actually go up. When they couldn’t pay for their “McMansion” they lost it
to the legal owner the bank that had paid for its construction.
It used
to be the American dream to have your own house that you built with your own
two hands and that you could raise your family in. however in the modern day it
is becoming harder and harder for the new generation of people to buy and
actually own their own home luckily there is hope on the horizon. Due to the government
stimulus plan the fed had caused a lower interest rate that was stable when it
came to loans not to mention the Federal housing commission was able to stabilize
the entire market as well as offer an mortgage insurance plan. Which actually
put a sense of stability to the chaotic market which made nervous investors
calm down a bit something that helped a lot more than anything else that could
have been done.
The fact
still remains that many people who thought themselves to be homeowners had to
see their dreams go up in smoke like their bank accounts because of the
fluctuating interest rates. A house was
once thought of as an investment in the future because of the thought that many
generations could have the home it is slowly becoming that not even one generation
can hold onto a house. Hopefully people will learn the truth of interest rates
like I have from my time in economics and will learn that they are not a stable
thing.
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