WASHINGTON – We Americans think of ourselves as problem-solvers, but the housing collapse has so far eluded all solutions. Perhaps 10 million homes have gone into foreclosure since 2006; millions more will follow. From their peaks during the real estate bubble, home prices are down 30 percent; new housing construction has dropped 75 percent; and existing home sales are off almost 30 percent. Housing’s collapse is one reason why the economic recovery is so weak. Construction remains depressed, as are the appliance and furniture sales spurred by home buying.
It may be that patience is the only cure. Home prices have to find bottom; only then will more buyers return. Almost all efforts to accelerate that process by stemming foreclosures have come up short of promises. The Obama administration originally hoped that its Home Affordable Modification Program (HAMP) — lowering some homeowners’ monthly mortgage payments — would help up to 4 million borrowers; at last count, the number was 850,000.
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