Blowing Bubbles

House prices have fallen to where the experts told us they should be back during the bubble. So why is this all of a sudden bad news now?

Bloomberg reports...

The Commerce Department reported today that new- home sales fell 2.9 percent last month to a 17-year low. The median sales price declined 11.5 percent from a year earlier.

Sliding property values mean more Americans will be under water on their mortgages, likely leading to a further increase in already record foreclosure rates.

I don't understand people who decide to abandon their house because it's suddenly worth less. Where do they go, back to renting? And how will they get a mortgage when they decide to buy back into market (after prices have risen). American economic literacy is dismal.

Not to worry, plenty of citizen-moochers, taking a cue from beggar-bankers and Wall Street welfare queens, are proposing solutions:

Ara Hovnanian, chief executive officer of Hovnanian Enterprises Inc., New Jersey’s biggest homebuilder, called on the government to provide an economic stimulus for the housing industry.

“If government wants to get to the root of the problem they need to fix housing first,” Hovnanian said in a conference call on Dec. 17.

Mr. Hovnanian, government trying to "fix" things is the root of the problem.