Should the government have let the housing market crash? Should it now?

[newtothegame]

From Yahoo Finance: Over the last 18 months, the administration has rolled out just about every program it could think of to prop up the ailing housing market, using tax credits, mortgage modification programs, low interest rates, government-backed loans and other assistance intended to keep values up and delinquent borrowers out of foreclosure. The goal was to stabilize the market until a resurgent economy created new households that demanded places to live.

As the economy again sputters and potential buyers flee — July housing sales sank 26 percent from July 2009 — there is a growing sense of exhaustion with government intervention. Some economists and analysts are now urging a dose of shock therapy that would greatly shift the benefits to future homeowners: Let the housing market crash.

When prices are lower, these experts argue, buyers will pour in, creating the elusive stability the government has spent billions upon billions trying to achieve.

ed for sp

[Yuugal]

1. let it crash!

then maybe I could afford one. Why a renter like myself should support policies that send tax money to people rich enough to own a home is beyond me. If their McMansion is underwater then I hope they pick themselves up by their own bootstraps like they always tell the rest of us to.

[Kurt_and_Hunter]

2. What percentage of Americans do you consider rich?

[Synicus Maximus]

6. Apparently 67.8% of Americans are rich according to the .

US Census Bureau.

[texastoast]

3. Oh, no. Let's deregulate it some more

That's worked so well.

:sarcasm:

[bluestateguy]

4. I for one am getting kind of tired of hearing all the brooding about the housing market

At the end of the day, if somebody buys a house that they fundamentally cannot afford as based on their normal monthly income, then government programs are only going to provide a temporary patch to stave off the inevitable. Better for that person(s) to move into a house or apartment that fits their income category, such that their mortgage is not swallowing all of their disposable income each month.

[haele]

5. No, the only people still able to buy houses are the type that got us in this mess -

Greedy idiots with just enough money on their own to start the cycle of buy several houses at pennies for the dollar owed, "clean", and flip for profits within 60 days of closing. Or the absentee landlords who buy low, "clean" (or knock down/rebuild or modify into multi-units) and rent out to get back twice the mortgage payment they are paying. We don't need more people who are going to buy property as investments, not to buy homes and stablize a neighborhood. That's already happening with short-sales and forclosures in California.

We need those buying who need the lower prices to be able to buy houses or condos to live in for less than what they pay in rent, not "fix-up and make a profit" people who find loopholes to skew the local tax revenue base for 3 - 6 months while they're in between the buy and sell periods.

We certainly don't need people who are going to go ahead and create another real estate bubble while everyone else who wants a home to live in has to wait for the jobs and the credit markets to open up because they can't afford to come up with even the 25% or so down for a reduced forclosure just to qualify for a loan with "good" credit.

Haele

[EFerrari]

7. It is crashing. The only question is WHO it crashes on --

working families or the Wall Street criminals that brought us credit default swaps. Gee, let me guess who is "it".

[customerserviceguy]

8. The housing bubble

was pumped up by a variety of things, greed on the part of potential homeowners who watched too many episodes of "Flip this House", avarice on the part of realtwhores, mortgage reps, and other commissioned individuals who kept the good times rollin' for the sake of their own temporary benefit, tax policies that favored housing over other sorts of investments, and Federal institutions like Fannie Mae and Freddie Mac, who were only too willing and able to catch the whole mess when it fell apart.

We absolutely will not be out of this recession/depression until the housing market hits bottom, and steps to delay the arrival of that bottom are simply CPR on a dead body. When the lousy two-bedroom condo next to ours sold for $420K, we both knew that the market had overheated to the point of not being sustainable.

[Saphire]

9. I think it already has crashed.

[gophates]

10. I'd like to see government ownership of a lot of the foreclosed homes.

Too many homeless out there. Might as well buy the foreclosed stuff and give people a place to live. Watching the people in McMansions squirm at seeing "riff raff" in the neighborhood would just be a fringe benefit.