The Housing Bubble: Still Popping?


Jacob Goldstein thinks that housing prices are likely to fall further. Ryan Avent's two cents:

Falling home prices are nice for those looking to buy new homes. But falling prices also exacerbate ongoing crises, including the economy's flirtation with deflation and the problem of rampant negative equity. As values fall, ever more homeowners find themselves owing so much more on their homes than they're worth that default becomes the most attractive optionwhich leads to rising bank-owned supply and more downward pressure on prices.

The bright side is that these data are released on a significant lag. The outlook for the American economy as a whole was deteriorating during the months represented by the latest index. From October on, the outlook has improved. So, too, may home prices.