In response to:

Housing Recovery, Real or Fake?

Phil from NZ Wrote: Feb 09, 2013 2:40 PM
Matt Ridley, in "The Rational Optimist", asks the question in the first few pages, why housing has not fallen in price relative to incomes, like most manufactured goods. He says this is because of government involvement. He has a good point. The real price of housing HAS fallen in all the US cities where government does not interfere with the supply of land for housing. The price of farmland has been falling relative to incomes, for decades; it is now around one quarter of what it was 60 years ago. Therefore, the price of lots (per square foot) on the urban fringe has fallen too, where government lets it . Govt messing with "services" also prevents price-efficiency gains.

 

Let’s be clear: The housing industry is one of the most regulated and manipulated sectors of the economy. The seeds of the financial meltdown were planted by social engineering by liberals in the Clinton administration, mandating loans by quota based upon income instead of prudent lending standards.

It became so bad that when the current anti-gun zealot Governor Cuomo of New York as head of HUD under Clinton ordered welfare and unemployment be counted as ‘income’ to qualify for a mortgage. The goal of home ownership by all Americans meant radical changes to prudent lending practices had...