Mortgage Industry Trends

I just love the way the stock market works. Its almost like a politician, blowing in the wind of the latest poll.

Great, February saw resale of existing homes increase 2.9% over January. Good thing its a leap year. Somehow the small fact that the median sale pric was down 8.2% doesn't faze the 'market'.

There is one thing that is clear- its not the end of the world. People still need to buy homes, and this market is slowly finding its way to the bottom.

The market, and by market I think I mean the broader capital markets, dislikes unknowns, and the correction in the mortgage industry is a giant unknown. How far, how fast, when will we reach some kind of steady ground.

I don't think we're at the bottom.

If you think property values have further to fall to fit in line with some pre-conceived notion of affordability, I give you an alternative: inflation.

Lets assume home prices hold steady or decline only slightly over the next five years. Add a depreciating dollar, more expensive energy and overall inflation- and viola.

The key question, and this is macro, do incomes keep pace and increase at some point, or does our general standard of living simply melt away, unnoticed?