Housing Bust Over Again!

The U.S. Housing Bust Is Over – WSJ.com.

The MSM loves to call the end of the housing bust. These are the problems with the housing market:

  1. Huge shadow inventory of homes in the foreclosure process.
  2. A lot of people are underwater on their mortgages, and these people would love to sell upon a rise in the market. This means that an increase in housing prices will be quick to breed new inventory thereby keeping a lid on prices.
  3. Low employment levels are depressing new household formation levels.
  4. The real rate for a mortgage is pretty high, because the rate of inflation is so low.
  5. The increased levels the author is touting are from such low baselines that it is disingenuous to use them as proof of a rising market.
  6. If all economists agree on something, watch out. Groupthink is in play here.

Analyzing the charts and other information in this article, I believe a more accurate conclusion is that housing has hit the bottom. It probably will not get worse for some time.

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