Why Are Home Sales Plummeting in America?
Why are home sales plummeting? On the surface, it is because the government’s tax-credit for first-time home buyers lapsed in April. It takes a couple of months lag-time between buyer purchase decisions and the actual close of escrow, and so the expiration of the tax-credit is just now hammering the market. And there is a huge backlog of housing stock. And sellers are holding out hope that they can get close to peak prices for their homes, while buyers believe that prices will fall further – and so are waiting until prices decline further. But there is a more fundamental reason that home sales are plummeting. Specifically, when housing crashed in 2007 and 2008, the government had two choices. It could have: (1) Tried to artificially prop up housing prices; or (2) Created sustainable jobs, broken up the big banks so that they stop driving our economy into a ditch, and restored honesty and trustworthiness to the economy and the financial system. All this would have meant that the economy
