2. Mortgage debt has been manageable
3. Bond yield rates have decreased as European money has been buying us bonds. Banks use Bonds as assets. If the price of the bond goes up, this means the banks assets have increased giving the bank more money to lend or use to buy shorts in future market decreasing demand for silver. A short is an offer to sell. A long is an offer to buy. If more offer to sell are created than demand drops.
4. The Russian copied Fannie Mae model of home ownership encouraging Russian home ownership creating mortgages and securitize mortgage bonds
5. Housing construction declined 70% from 1992 to 2002 in Russia. Construction declined because there was a lack of trust between the contractor and the customer. No one wanted to pay up front or deal with credit. (https://web.sbs.arizona.edu/news/why-russians-think-americans-dont-own-their-homes)
6. Most Russians could not afford the mortgage payment in relationship to their wages. Many Russians view interest payments as “unfair” and overpayment on credit debt.
7. In Russia most of the housing is apartment and they view an apartment as an entitlement
8. Factors affecting a US real estate boom: Mortgage prices have stabilized, interest rates are low (3.58% for 30 year fixed), banks are accepting minimal down payments on Mortgages, FHA has reduced insurance premiums. More consumers are applying for mortgage loans with banks. (http://www.cleveland.com/business/index.ssf/2016/04/low_rates_low_down_payments_an.html)
9. Low interest rate heat the economy as money becomes available for growth. When investors buy real estate, it creates demand and price increases – this creates a wealth affect for home owners.
10. Long periods of low interest rates creates and asset bubble. A commercial real estate asset bubble is forming. When markets correct for the overvaluation in assets, interest rates rise and deflation sets in, as consumers slow their buying.
11. Chinese investors want to be part of Detroits recovery. Detroit restructured its $18 billion in debt. 50,000 federal immigration visas will be extended to 10 years. (http://www.nbcnews.com/news/china/chinese-investors-snap-property-bankrupt-detroit-n253186)
12. Chinese investors are making bulk purchases of real estate for $25,000 per unit, buying 100 to 200 units at a time. The Chinese rich are investing in Detroit like it one of their cities in China. Over 50% of China’s millionaires are looking to migrate outside of China. China is the second largest investor in America after Canada. (http://www.forbes.com/sites/gordonchang/2013/12/08/chinas-newest-city-we-call-it-detroit/#4c21e21e36d8)
13. China’s rich are buying real estate in New York, Los Angeles, Philadelphia, Detroit, Houston, Chicago, Las Vegas, Atlanta, San Diego, and Memphis.