Housing’s Good News Is Government Cash Shortage: Caroline Baum

With U.S. home prices back down to their 2009 lows, you might be wondering what all the government programs to stabilize the housing market have accomplished.

And for good reason. Various federal initiatives, especially the first-time homebuyer’s tax credit, seemed to put a brake on the three-year dive in prices from July 2006, the peak, to April 2009. Home sales and prices bounced, only to hit the skids when the program ended in April 2010. Which is what you’d expect when the government stops cutting checks for $8,000, payable to the homeowner on completion of his purchase.