House prices continue to fall, and they will do so until their long-term price trend is reached…
That’s roughly 10-15% lower, and it’s quite possible prices will overshoot the trend on the downside.
What’s needed is what’s been needed all along: modification of mortgage loans by bankruptcy courts, reducing principal so as to keep homeowners in their homes.
Alas, the cramdown approach has twice failed to pass the Congress, and the Administration’s housing program has been a miserable failure.
It’s difficult to see how the US economy will recover strongly so long as housing remains a drag and unemployment remains unacceptably high (well, it should be unacceptable at these levels but our leaders don’t seem to care).
Gorilla says: “Austerity doesn’t hire and it doesn’t sell houses!”