Housing Market Devastation in the US

The following picture from the Calculated Risk blog makes clear how badly house prices have fallen since early 2006:

Click to Enlarge
The posting points out:

The index is down 5.7% over the last year, and off 32.8% from the peak.

This is the sixth straight month of year-over-year declines, and the seventh straight month of month-to-month declines. The index is now 1.6% below the previous post-bubble low set in March 2009, and I expect to see further new post-bubble lows for this index over the next few months.

• CoreLogic: 11.1 Million U.S. Properties with Negative Equity in Q4

The wealth of most Americans is in their homes. As house prices fall they lose wealth. Worse, those with mortgages get into greater and greater trouble with an increased likelihood of foreclosure. But even without foreclosure, if you are "underwater" on your mortgage, you are making payments on an asset that doesn't have the value that those mortgage payments supposedly represent. You are really behind the 8 ball.

Going back to 2007, Bush promised assistance for those with problems with their mortgage. Obama had is mortgage assistance program. But none of these has dented the problem. Neither president was serious about this problem. They were willing to throw a trillion dollars to the Wall Street banks, but they only pitched pennies to ordinary folk with their mortgage problems!