published Friday, June 3rd, 2011

Housing picture grows dimmer

The continuing fall of the housing market should serve as a lesson to the federal government not to pursue further efforts to prop up different sectors of our economy, but rather to rely on the free market.

Through early 2010, the federal government unwisely offered tax credits of up to $8,000 to many home buyers. The theory was that the credits would shore up the housing market.

Of course, when you offer “free money,” there are takers. So a relative handful of Americans took advantage of the tax credit at the expense of the rest of us, who had to pay for the credits with our tax dollars.

But it didn’t work. This past April, contracts to buy previously occupied homes fell sharply — far below what the National Association of Realtors considers “healthy.”

That followed earlier negative housing figures.

That’s no surprise. History shows that government bureaucrats cannot create economic growth by intervening in the market and picking winners and losers.

That duty should be left to the everyday economic choices of the American people.

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zarvuu said...

The value of homes were tremedously inflated for the past decade. It was not sustainable nor practical for poeple to supersize thier homes and raid the equity of their homes for vacations they could not afford. What goes up way too fast usually comes crashing down. Are we even at the bottom? What if housing prices continue to decline? In fact, most economist believe that home prices will not stablize until 2014.

It was really the perfect economic storm. Moreover, with people purchusing homes they could not afford. Next,with the banks and mortgage companies selling loans to consumers that they could not afford we have come to this place of uncertainty and concern. Now the ecnomical infrastructure is collasping all around us. Some times even block by block. It was not sustainable and those entrusted with oversight, those who sold and marketed the loans and even the consumer who bought the mortgage is complicit in this economic collaspe.

June 3, 2011 at 7:29 p.m.
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