Housing Slump Almost Over


Okay, maybe not almost, but the Wall Street Journal writes that at least the "end is in sight." Home prices, said economists at the National Association of Home Builders' latest conference, could hit bottom by the middle of next year. "Many of the economists seemed optimistic that the government's bailout plan, which includes buying toxic mortgage debt, will lead to housing's recovery. More affordable prices, pent-up demand, incentives on new homes, fewer housing starts and expected declines in interest rates for fixed-rate mortgages also should help ease the crisis." The bounce back might be independent of a stock market recovery, since unemployment is up, housing prices could fall as much as 10 percent more, and 12 million people owe more on their homes than the homes are worth. And, for a while, supply will outweigh demand. What lessons should we learn from this mess? Among other things, "Just because someone is offering to loan you money doesn't mean you should take it."
End Is in Sight for Housing Slump [WSJ]
Photo by trance.field.

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