Housing - Again!

So anyone have any thoughts on whether or not the $8000 new home buyer tax credit will be extended again? Yeah, I didn't think so.

The economy is still settling. The housing market is one of the things that is just going to have to settle into a lower state of equilibrium.

LEt me explain. For a long time, American businesses and consumers were living under the assumption that expansion was always the best move. Getting money for this expansion involved taking out loans. And then leveraging to take out more loans. And so on to the nth degree. This is what's known as living beyond your means, or trying to create virtual wealth. Real wealth, of course, is created with real assets (such as ideas, natural resources, and industries). Again, the party can't go on forever.

So what does this have to do with the housing market and the new home buyer credit? As I said, housing prices are still declining to what they really should be rather than their inflated levels. Unfortunately, no one wants to buy a home, and, even at the lower prices, fewer people can afford them. We still have a long way to go to reach any kind of stability in the housing market. Hence the continuing efforts of the politicians to cushion the fall by enticing more people into buying a home...