Because those buyers have to be priced out of the market to bring down the cost of home ownership. The actual costs of purchasing a home has gotten ridiculous. What difference does it make if one pays $200k for a $100k home if over the length of the loan the interest rate of $200k is more than paying interest of a $100k home?
There is a glut of home buyers right now. It is a sellers market. As a consequence home buyers are in bidding wars that include a pass on inspection and any other condition NORMALLY found in the purchase while paying far over the value of the house.
The purchasers don't see it that way. They see the housing market continuing to increase in home values. Some home buyers are purchasing to wait a short while the house increases value and building equity nearly instantly. Once there is an appreciable value to the home they will sell it to continue to purchase homes and increase their personal net worth. That is an inflated idea. It is an artificially increased value market.
The cost of the quality of life of Americans and the world for that matter has to top out and come down to a reasonable level. It is way costs of living is out of line to the exceed income of most Americans and the world for that matter. If housing is allowed to dictate cost of living along with energy eventually all those homeowners who seek to increase their personal equity and asset value will price themselves out of their own market. We saw this before in 2007 and 2008. People will lose their homes and their asset value and their will be a return to large numbers of bankruptcy and this time perhaps more than a Second Great Recession, but, instead a severe depression.
The labor market plays into this as well. Wall Street will continue to borrow free money to increase their market penetration and an increase in their ability to find purchasers. That is why the job market is out of sync than usual. As Wall Street has to compete for employees the wage is going up to the labor market. That is great for those normally stuck in the Working Poor, however, it also interprets into higher costs of goods to the consumer therefore nullifying the higher wages.
This vicious cycle has to stop. When the Democrats demanded a minimum wage of $15.00 per hour it was to provide a quality of life to working Americans that should exist. But, it is mute now to demand $15.00 per hour minimum wage. The competition for employees is intense and employers have gone over $15 per hour pay rate all by themselves without laws to demand it.
So, where do people go from here? As cost of living removes the value of money in the way of purchase power, the Working Poor are once again returned to the status of having to work two to three jobs to support a family with two earners in the household.
One other thing about home ownership. The costs to maintain a home will be a pressure as well as the cost of government in their costs. That means taxes will increase as well as maintenance. That will ultimately push all those homes purchased at higher than normal value back on the market and quite possibly repossessed by a bank that was paying zero interest on the money they advanced. That puts the banks exactly back where they were in 2007 into 2008.
When all these realities come to pass, the overall impact will an enormous depression that people will have to dig themselves out of.
Today, the USA is facing another high homeless rate. The average rent in the USA is $2000 per month. That is ridiculous. It is unsustainable. There will ultimately be a collapse of the entire world economic system while it is racing to end the threat Russia and China claims as their touted power.
Every American is capable of understanding this paradigm. They need to save their money in banks with better interest rates. Currently, some credit unions are offering higher interest rates.
Get this, a federal credit union encourages it's members to use their debit cards. They offer a $10 reward per month for significant use of debit cards. They see it as a protection issue as well as understanding their depositers. How do they do that? Come on. You know this, but, just not exposed to it across the spectrum of debit card usage in the country.
When a consumer uses a Mastercard or Visa or whatever credit card they use there is a fee charged to the merchant for the money advance from the credit card company. The credit union involved encourages use of their debit card because they can return some of the fees to the membership as a $10 per month bonus depending on the number of debit card transactions incurred that month.
Hello, America. Wall Street is racking in YOUR hard earned wages while you think you are doing the best you can and this rate of inflation is great for selling homes.
WAKE UP!!!
