I was reading the paper today and I found yet another article about how decreasing prices are putting more pressure on people's mortgages. Which seems to me very weird. As prices go down people possibly feel more stupid for paying so much, but it doesn't have any impact on their ability to pay the mortgage. Unless they're possibly doing some silly leveraging thing where the bank gets scared about equity and repossesses the house (or probably several). But the battlers these articles like talking about don't tend to own many leveraged properties, so I don't think this affects them.
If anything, dropping house prices reduce the burden on the average house owner. More people are able to buy houses with smaller mortgages. I don't understand how journalists think the price boom can be bad for home-buyers, and then the price crash is also bad.
There was an article in the Epoch Times called "Falling prices increase mortgage burden", which prompted this rant. But they definitely aren't the only ones saying this kind of thing.
yes it is funny how simplistic journalism can be which then serves to give permission for people to think what they are saying is true.
keith / 12:13pm / 22 August 2008
Yes. And it’s funny how simplistic economics can be, when we are able to make any change in any variable sound like a disaster.
Ryan / 12:16pm / 22 August 2008