Don’t Let the Economic Blues Beat You Down
By Angela Baca
In a 8/31/07 address to the Federal Reserve Bank of Kansas City’s Economic Symposium, Chairman Ben Bernanke said: “Sales of new and existing homes have declined significantly from their mid-2005 peaks…The cutback in residential construction has directly reduced the annual rate of U.S. economic growth about 3/4 percentage point on average over the past year and a half…”
The fact is that Americans have known about the housing slump for almost 2 years, and many tried to get in on the action before the interest rates rose too high. Now, the mortgage rates are not greatly increased, but it is definitely harder to get a mortgage than it was last year or the year before. The fact that residential construction is being cut back by homebuilders is also a good thing. This type of pattern encourages less development, which is bad for the environment. It forces would-be homebuyers to consider the options of resale homes and to live where they currently live.
Americans have been living beyond their means for too many years. Think of this current economic crisis as a wakeup call to all of us. We have to stop spending so much and seeking instant gratification. We need to learn to be happy with what we have and make incremental changes in our standard of living.
If you try to look at all you have, you will realize that you probably don’t have it so bad. If you want to buy a house, you can probably scale back on what you wanted to build and buy a nice resale home. With the current buyer’s market, you can benefit by naming your price.
Avoid becoming overly concerned by media coverage of the decline of the housing market and the overall economy. The market booms and busts regularly over time and it will have to come back up again. There may be tough times ahead, but these times help our country to become strong and to return to good budgeting and spending more time with family. If we don’t have as much money to travel outside of the home, we become more productive at home. And here’s a thought. If you can’t afford to buy a house or spend too much on gas, now is a great time to start that Internet business you’ve been pondering for years. Chin up! There will be better days ahead. Start saving your money and you will be poised to build a great house when the market picks up again.
