“Every day the economy is getting better and better.”
That’s what the Obama administration would have you think. But the reality is very different.
The US housing market is getting worse, not better.
That corrupt government-subsidized institution Fannie Mae today reported a net loss of $6.5 billion in the first quarter of 2011, and is requesting $8.5 billion of funds from the US Treasury to eliminate the company’s net worth deficit.
New data released by Zillow, the real-estate information company, show house prices are falling at their fastest rate since the burst of the real estate bubble.
Brett Arends of MarketWatch reports today, May 9, 2011:
- Average home prices are down 8% from a year ago, 3% over the quarter, and are falling at about 1% every month.
- Prices fell in all but four U.S. metro areas.
- The percentage of homeowners in negative-equity positions — with a home worth less than its mortgage — has rocketed to 28%, numbering 16.3 million families, a new crisis high. That means more than 1 of every 4 homes in America are under water! For many, their homes — for which they are hemorrhaging cash on monthly payments — may never be worth as much as their mortgage.
- Zillow predicts prices will fall about 8% this year and says it no longer expects the market to bottom before 2012.
Mark Calabria, economist at the conservative Cato Institute, laments the $22 billion tax breaks for home buyers between 2008 and 2010 as “a giant waste of money” — a brief suckers’ rally that ended last summer. “None of these things really turned the housing market around. They just put off the adjustment for awhile.”
Arends points out that falling real-estate prices mean spiraling hidden losses throughout the economy, from banks to homeowners. He concludes: “Recovery? What recovery? This looks a bit like a depression to me.”
Read the rest of Arends’ article HERE.