Too Late To Save The Housing Market
As I wrote in the last post, not much can be done for the housing market, short of a massive government bailout. The US Treasury Secretary is reported as announcing today that such a bailout would not be possible. Bloomberg writes:
U.S. Treasury Secretary Henry Paulson’s plan to prevent as many as 1.2 million people from losing their homes by freezing interest rates on subprime adjustable-rate mortgages will bring no benefit to the depreciating housing market.
“At best, it may stop some of the hemorrhaging of the housing market, but it doesn’t necessarily turn things around,” said Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies in Cambridge, Massachusetts. “The fundamental problem with housing is oversupply.”
Those upside down in their homes should take note of this announcement. It’s hard enough to get out of debt in an upturning market, losing money on a house can be the last nail in a debtor’s coffin. Now might be the best time to sell, before things get any worse.
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