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Gary Shilling

Nothing Is Going to Save the Housing Market

The U.S. effort to revive housing can't overcome the economic headwinds working against it.
Housing just isn't what it used to be.

Housing just isn't what it used to be.

Photographer: Joe Raedle/Getty Images

U.S. housing activity remains weak despite six years of federal government aid, strong interest from overseas buyers, rock-bottom interest rates and massive purchases of mortgage bonds by the Federal Reserve. Does this mean housing may never spring back to its pre-recession levels? Many signs point to yes. 

Don't blame the Chinese, who are showing an abundance of interest. Their share of foreign purchases leaped to 16 percent in the year ending March 2014, from 5 percent in 2007. They paid a median price of $523,148, higher than any other nationality and more than double the $199,575 median price of all houses sold.