
The current housing recovery is not supported by economic fundamentals, but manipulative price supports will likely hold until fundamentals improve. The word recovery implies improvement, but so far, the improvement is limited to price. Shouldn’t a housing recovery show improvement in multiple areas, not just price? A real housing recovery would be characterized by resurging new home construction and steady gains in sales and prices commensurate with strong job growth and rising incomes. The activity currently characterized as recovery lacks these characteristics. To this, lenders and underwater homeowners undoubtedly say, "so what?" As long as house prices go up, lenders and loanowners get out from under their bad bubble-era loans; they care about nothing else. Unfortunately, this so-called recovery hurts new buyers,…[READ MORE]