http://www.oftwominds.com/blogjun10/housing-bust06-10.html
The housing market is doomed in the U.S., and the causal factors are all well-known. But we don’t want to know, because that knowledge would re-order the American culture and economy.
Yesterday I suggested that what we don’t want to know is as important as what we know/don’t know. We know housing values are artificially and unsustainably high, but we don’t want to know this.
About two-thirds of U.S. households own a house (75 million); 51 million have a mortgage and 24 million own homes free and clear (no mortgage). Most of the other 36 million households are moderate/low income and have limited or no access to credit and limited or no assets.
Who benefits from a housing market propped up by massive government subsidies? The homebuilders, lenders and real estate industries, of course, but the 75 million “stakeholders” in the housing market also want to believe the market is “fairly priced” and bound to recover its bubble-era heights.
Why? As I reported in Housing and the Collapse of Upward Mobility (April 16, 2010), the stupendous equity extraction of the bubble years left U.S. homeowners with little equity in their homes. The bursting of the housing bubble thus effectively destroyed most of the middle-class wealth held in housing:
.
