US home prices slump as crisis deepens
- Thread starter OntarioVanMan
- Start date
They were saying on the news today that houses in our area were down to 2002 levels. I bought my house in 2002, it is about 40% below 2002 level. The dirty rotten liars!!
Camper
Not a Member
Even at 2002 levels, prices were still heavily inflated, relative to household incomes, rate of inflation and just about every other economic metric.
The Federal Reserve has kept interest rates artificially low for too long. Fannie and Freddie Mac have propped out the mortgage market too long by creating this moral hazard which allowed banks to make bad loans, knowing they could pawn them off to them. Local governments have also had a hand in this by allowing zoning boards to over regulate the permitting process (minimum lot sizes, unnecessary structure codes, etc.).
The sooner the government(s) and the Federal Reserve get their paws out of the market, the sooner the market will complete its natural progression to real sustainable, free market-based levels. Prices still have a long ways to fall before getting to that point.
