Housing IS the US economy today.
For homeowners, who will lose all they have and more if prices keep on dropping. Which they will, just check "normal" price levels back to the 1960's-70's.
For construction workers, who were a huge part of the US labor force over the past 10-15 years.
For the mortgage industry, the brokers, flippers et al, who are all getting annihilated.
For the lending industry, who are all hugely invested in the market, even though the government bailed them out through Fannie and Freddie.
And for that same government, who have a seemingly impossible choice to make. Do they do what they know is right, because it's inevitable down the line, that is, let the market decide home prices, which would end their political careers in no time, or do they continue the pointless practice of propping up the zombie market, which puts a rapidly increasing burden on the shoulders of the US citizen, who already doesn’t have a nickel to scratch her behind with?
They won't do what's right by you, they'll do what’s right by themselves.
America needs open books. It needs to know what a home is "truly" worth, like it needs to know what the government debt is, and the deficit, it needs to know what its children can expect to pay for health care and education in the future, and what they can expect to get from their pension funds. All of this though, the entire picture, is so bleak that nobody you’ll vote for anytime soon will tell you anything anywhere near the truth.
Imagine what another 20%, 30% or 50% drop in home prices would do. To you yourself, to your neighbors, to your community, your town. And, in the end, the nation.
Well, guess what, it's coming. You can't have sales drop by 27.2%, and expect prices to remain the same, not even close.
It's somewhat funny to see that people like Business Insider's Henry Blodget are discovering that Fannie and Freddie have been used to raise US home prices; I’ve been saying that for years now. Then again, if Professor Lawrence Kotlikoff is right is his assessment that US debt is $202 triliion(!), what does it matter where the tidal wave comes from? Ya drown, you're dead. And that's a one-time affair.
Your government is standing paralyzed by terror at the fork in the road, and the fork is not standing still, it's forcing them to pick one way or the other. And their interests are not the same as yours. So get out of the way while you still can.
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