Fritz Pfister

The news has been full of stories about a housing slowdown. Rising interest rates, satisfied demand, and the steep increase the past several years in the price of housing have all contributed to the slowdown.

In my opinion as long as people can afford to buy, housing sales will remain strong. Certainly the rise in interest rates have diminished the purchasing power of the consumer, however 6.5% 30 year money is still cheap by historic standards. There are other underlying problems in household budgets that are starting to affect the spending habits of consumers.

First the law increasing minimum credit card payments has gone into effect, raising the amount of required payment. Although mortgage rates are still cheap, most credit card interest rates are tied to the prime rate which has increased by 3.5% in the preceding 21 months. The double whammy of required increased minimums combined with higher rates will impact the disposable income of families carrying credit card debt.

The cost of energy has also impacted families disposable income over the past year. The news has been good recently when the price of oil fell slightly below $60 a barrel. That may change with a belligerent Iran being referred to the U.N. Security Council, the Security Council may impose sanctions against the country. One Iranian official claimed Iran would withhold oil from the world markets in response, using oil as a weapon. The next day another Iranian leader said Iran would not use oil as a weapon. Who knows what will happen?

Either way the situation is tenuous at best. Iran seems to be determined to become the next war zone by defying the world with their nuclear ambitions. Not that the U.S. would act unilaterally to quell this threat, other allies of the world would join the quest. Israel cannot risk a nuclear armed Iran, regardless what action the world community may take.

Therein lies the rub, even if Iran doesn’t play Russian roulette with the oil markets, something has to give, and that something is Iran’s nuclear ambitions. They will give, either as a result of U.N., U.S./Allied, or Israeli action to stop it. During these tenuous times the world oil market will be unstable at best.

Some experts have predicted $100 a barrel oil as a result. That would drive gas over $4 a gallon, and heating costs further through the roof. This will have a devastating impact upon disposable incomes.

The Iranian threat must be dealt with and it will come at a price. The pressures of higher interest rates, new credit card laws, higher credit card interest, and higher energy costs will combine to lower consumer confidence and their willingness to spend. In America, consumer spending is the engine that drives the economy.

The bottom line is, thanks to Iran, the economy including the housing market will be impacted, until the nuclear issues are resolved. Better to have a slowing economy, than a radical country with nuclear weapons that have publicly stated their desire to wipe Israel off the face of the earth, and who want to bring pain to the U.S. Thanks Iran for your humane, & worldly compassion.

Now is the time for congress to take meaningful action and pass laws making the tax cuts permanent. Failure to make tax cuts permanent would be the straw that breaks the disposable incomes’ back, which in my opinion would lead to recession. Congress can’t control Iran, or the cost of oil, however congress can determine if family incomes will be spent on goods and services, or sent to Washington D.C. to once again be wasted by politicians. Don’t be fooled by the “we must raise taxes to pay off the deficit” crowd. Do you really believe any politician will use the money as intended? They never have, and never will.

Call your representatives to congress, and senate today to voice your opinion. Tell them tax cuts sparked the recovery from the last recession (made worse by 9-11). To take back the impetus to the economy in the face of rising interest rates, cost of housing, and energy prices, would certainly lead to recession. Ask them if they are in favor of continued growth, or in favor of government largesse through higher taxes. Then vote in November accordingly.

Following two days of incredible winter weather with temperatures in the 60’s and 70’s March 10 & 11, two tornados ripped through Springfield on the 12th. Of course the nasty arrival of these devastating storms came after dark. Yes, it was determined the two F2 tornados caused destruction along two paths of about 5 to [...]

Bruce Springsteen sang “Glory Days”. There’s an old saying; “The older I get, the better I was.” Recall Ted Williams response when asked; “How do you get so many hits?”; response: “I hit ‘em where they aint!”.
The real estate markets across America have changed, or are changing. You probably will have friends and coworkers that [...]