The Housing Market Just Got Worse
Monday, May 9, 2011
SAN DIEGO Several articles today mentioned the fact that the U.S. housing market has suffered a double-dip recession. After home prices rose a bit over the course of 2009 and 2010, a quarterly report from Clear Capital shows they have dropped below what we thought was the trough bottom of May, 2009.
Meanwhile, the fiscal detritus of the housing bust continues to litter the ground. The nation’s largest mortgage company, Fannie Mae, just asked the government for another $8.5 billion to cover bad loans it made prior to 2009.
The second dip of the housing market is a sad fact to me. I bought a new house last August and I almost certainly paid more for it than I should have. On the other hand, I also sold a house last year and I probably got more for it than I should have. In my case, it evens out.
In fact, there is more than one silver lining to the dark housing cloud. First-time homebuyers are well set, as homes have become very affordable. In fact, columnist Robert Samuelson writes that trends in housing costs will work to the long-term advantage of young people who are now entering the job market.
Good thing, he says, since these youngsters are faced with myriad other financial burdens, including paying the health care and pension costs of the baby-boom generation.