Patters

I think the reason for this is that many, if not most Americans, are seeing the value of their primary asset plummet because more and more homes are being foreclosed on. I think in MA, we are relatively well off in this regard. At least in Cambridge, where I live, the prices have actually gone up.

Americans on Housing Aid: Unfair but Necessary

By 51% to 46%, Americans are more likely to say that government aid to help certain homeowners who cannot pay their mortgages is "unfair" rather than "fair." At the same time, 59% of Americans say such government aid is necessary to stabilize the U.S. housing market.

...

Additionally, most see President Obama's proposals as not doing any harm to the housing market -- 60% believe these efforts to reduce home foreclosures will make the housing market a little (54%) or a lot (6%) better, 21% say it will make no difference, and only 15% think it will make things worse.

At the same time, Americans are evenly split on whether the home mortgage plan will help stabilize housing prices in their communities -- the essential rationale for government invention -- with 46% saying it will and 48% saying it will not.

BelichickFan

Obama is still in his honeymoon, all he has to say is "if we don't do this the earth will stop spinning" and the people reply "yes, sir, Mr. President, you are right". Give them 6 months or a year to realize that "helping" the housing market by artificially keeping prices high is not the solution.

Patters

I agree that's part of his strategy to get his agenda passed. People are scared. When 9/11 scared people, Bush used it to "help" Iraqis and the military/industrial complex. In the same way, Obama is using it to help Americans and the social service/human welfare complex.

That remains to be seen, but how much of you is hoping that Obama's ideas are wrong. What if he manages to reverse the economic decline? What if his plans work? Would you rather his plans worked or that liberalism failed?

BelichickFan

That's a tricky question. If it actually, no kidding, for real worked ? Of course I would be happy - although long term I think it's amazingly unlikely. However, if it's made to look like it worked based on an economy which cyclically ends recessions naturally (I think we're slowing that process down) and by pseudo numbers (like Barry claiming to have created X number of jobs based on some assumption that Y jobs would have been lost without his plan) then I won't be becoming a liberal any time soon.

sdaniels7114

I've little doubt that housing is too high; but its better to let housing prices stay steady for the next 10 years or so or grow relatively slowly and allow everything else to catch up, than letting this free fall continue to the bottom. I think its the shocks, the sudden drops that hurt much worse than gradual ones.

Think of how reduced lottery revenues in MA would be if the bettors were only allowed to play for one week a year. There's 10's of thousands of people who drop more than 10 grand on lottery tickets each year at a rate of 100-500 dollars per bar visit. Make 'em do all that betting and loosing in a week and it all goes away. They can psychologically handle being slowly bled a little, but would refuse to let the state cut open a major artery once in a while.

The housing market has a major artery wide open right now, we have to slow it to a trickle.

PatriotsReign

I can say right now for a fact (not an opinion) that there is no intervention that can stop home values from declining during a recession. There are several reasons...

1. Home values increased because people eligible to buy a home increased when lending standards went away. Now that lending standards are very strict, there are millions and millions fewer potential buyers. Nothing in this policy addresses this point.

2. There are almost 3 million more unemployed Americans than we had at the peak of the housing bubble. And there are millions more afraid of becoming unemployed. People don't want to buy even if they can afford it.

3. Lastly, we WANT home values to continue to decline because they were...read my lips....OVER INFLATED. Home value MUST reflect incomes. In other words, they must be affordable. They are still way too high and that's why they're not selling. That doesn't take a genius to figure out.

PatriotsReign

Can you think of any way to stop values from declining? How is helping existing home owners going to get others to buy homes. The only thing that stops decline would be for homes to start selling. Why would anyone buy now when they know we're in a recession and values will drop?

PatriotsReign

EXACTLY!!! Especially since over-inflated home values are what got us into this mess!

"Hey, lets fix this crisis that was caused by over-inflated home values by keeping them over-inflated"....you gotta be kidding that people are this stupid.

sdaniels7114

If prices stopped falling so dramatically people would stop thinking that way and begin to buy again. Besides its foreclosure auctions that really kick a hole in things. Slow the foreclosures by helping people and the price decline should slow too. I should reiterate that I agree that prices should come down, its just something that should be spread out, not rushed.

PatriotsReign

But that's like saying you'd like to see the economy and stock prices decline slower and have this recession last longer. Either way, they're going to find the same bottom.