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What's up with the Economy - July 28, 2009

Recently several banks released their earnings, and while on one hand they were all showing billions of dollars in profits, on the other hand they Mortgages Made Simple logo were cautioning that they had potentially 5 times as much in credit card defaults. So their losses are being held back in order to show high earnings now.

I also came upon one analyst's 3 indicators to signal housing has reached a bottom in price, housing starts, months supply of homes for sale and the home affordability index. When housing starts bottom and start to rise and months supply tops and begins to decrease home prices start to stabilize and rise within 12 months. And The home affordability index is the best it has been in 40 years. This is due to low home prices and low interest rates.

While it may be a good time to buy your first home, in my opinion we'll see low home prices for many years. Only buy if you plan on living in your new home for 10-15 years, this is not a time to speculate on housing prices rising. Be careful out there.

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