Reply #12: For a decade or more, "EZ-Credit"..nothing-down mortgages

[SoCalDem]

"created" a market for the gazillions of spec-homes that were built in boom-areas. (I live in one). Builders went buck-wild, putting houses up, and had to have buyers, so lenders created buyers out of thin air many times.

Once the promo-time ended and the real mortgage payments kicked in, many could never keep up....and every boom eventually ends, and the jobs go away.

Incomes have not kept up with housing prices.

All you have to do to get a peek into the problem, is to watch HGTV House Hunters (the shows from 2006-08) and you will see realtors showing people of very modest means, houses that cost $350-$500K , and telling them what a "good deal" it is. It's eye-opening. A couple with a wife in grad school & a guy with a regular job, planning out their lives on paper...with a $2500 a month mortgage....and no down payment.