US Housing Remains In The Toilet

A headline on the BBC today states that "US house prices [are] below 2009 low”. In fact, according to the report by the people who put together The Case-Shiller housing index, “Home prices continue on their downward spiral with no relief in sight.” (Great chart here.)

Since the market started its decline in 2006, why are we still here? More importantly, why are things not getting better? The answer is really quite simple. Nobody knows where the bottom is. Until people are comfortable that we have found the bottom, things will not improve.

So what is stopping the market from finding the “real” bottom? Government “stimulus” has made everyone wary of jumping into an artificially propped-up market. Like taking a “hair-of-the-dog” drink in the morning to cure a hang-over from the night before, “stimulus” has failed to fix anything. In the end, it has only made things worse, increased debt obligations, strung out those who can least afford it and prolonged the pain.

The answer? John Papola said it best in a FB post this morning, “Let em crash and find a real bottom. Fake stimulus is like an afternoon shot of espresso. It gets you through the evening, keeps you up way too late, and makes tomorrow even worse than today.”

And consider this, if the government is so concerned about helping the poor and really wanted everyone to have access to affordable housing, why is it fighting to keep prices artificially high?

A better tomorrow means finding the real bottom in this housing market. That won’t happen until people are satisfied that government meddling is no longer artificially propping up prices.