Housing: It's a double dip

How a double dip in home prices looks like:

Source: S&P

Home prices will remain a significant drag on economic recovery as they constrain consumer spending. That spending makes up 70% of the U.S. economy. The common wisdom that house prices always rise has long been tossed out of the window. It bears remembering that many pundits who predicted a "healing" less than a year ago, are still dominating the airways with their fiscal austerity now and interest rate "normalization" gospel.


Housing and unemployment remain un-addressed while House Republicans are set on extracting more austerity measures in current negotiations about raising the debt ceiling. Forcing the U.S. to default on its debt would be irresponsible at best, leading to higher interest rates, and at worst cause a global recession.


Sadly, both parties have convinced themselves that they have done all they can about unemployment and housing.