April 3, 2009
Understanding this solution requires having a few facts:


The annual rate of existing home sales in the US has ranged in recent years from 6.5 million to the current low of about 4.5 million homes.

About 500,000 new homes are being built annually, down from the record of over 2 million built in 2005.

There are currently about 3.6 million unsold homes in the US, while there was a record low inventory of about 528,000 unsold homes in January, 2005, at the peak of the boom.

The current median home price nationally is about $170,000. This is a healthy price, neither high nor low, as illustrated by this chart



Fact sources:

NAHB Economic and Housing Data http://www.nahb.org/page.aspx/generic/sectionID=150

National Coalition for Homeless http://www.nationalhomeless.org/

US Dept of Housing and Urban Development http://www.hud.gov/

Bankruptcy Court Offices http://216.152.235.70/webdir.fwx

Understanding the Mortgage Plan 3/5/09 http://www.washingtonpost.com/wp-dyn/content/article/2009/03/04/AR2009030404059.html

Pending U.S. Home Resales Slump More Than Forecast (Update1) 3/3/09 http://www.bloomberg.com/apps/news?pid=20601068&sid=atAM8ptyWEU8&refer=home

Reuters: INSTANT VIEW: Pending home sales drop; Bernanke urges action 3/3/09 http://www.reuters.com/article/gc03/idUSTRE52241520090303

Reuters: U.S. mortgage delinquencies seen up 50 percent 2/27/09 http://www.reuters.com/article/gc03/idUSTRE51P72L20090227

Reuters: U.S. January new home sales slump to record low 2/26/09 http://www.reuters.com/article/gc03/idUSTRE51P48420090226

Politico 2/26/09 http://www.politico.com/news/stories/0209/19371.html

Bloomberg.com 2/25/09 http://www.bloomberg.com/apps/news?pid=20601087&sid=aH3f8X2tkvWQ&refer=home

National Association of Homebuilders NAHB 2/18/09 http://www.nahb.org/news_details.aspx?newsID=8664

realtor.org 1/26/09 http://www.realtor.org/press_room/news_releases/2009/01/ehs_shows_strong_gain

Associated Press 2/12/09 http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/02/12/national/w070027S66.DTL&type=realestate

ABC News 2/6/09 http://abclocal.go.com/kfsn/story?section=news/business&id=6645932

Washington Times 2/13/2009 http://www.washingtontimes.com/news/2009/feb/13/foreclosure-filings-home-prices-drop/

Seatttle Times 1/26/2009 http://seattletimes.nwsource.com/html/businesstechnology/2008671683_aphomesales.html?syndication=rss

ABC News 2/6/09 http://abclocal.go.com/kfsn/story?section=news/business&id=6645932

NYT 10/07/08 http://www.nytimes.com/2008/10/07/business/07markets.html

Nations Building News http://www.nbnnews.com/NBN/issues/2008-04-14/Front+Page/3.html

eFinance Directory 11/2/07 http://efinancedirectory.com/articles/U.S._Housing_Inventory_Climbs_to_Record_Level,_Home_Prices_Fall.html

Los Angeles Times 2/28/06 http://articles.latimes.com/2006/feb/28/business/fi-econ28

Blogging Stocks http://www.bloggingstocks.com/2008/05/23/april-u-s-existing-home-sales-drop-unsold-homes-hit-23-year-hi/

USA Today 6/16/05 http://www.usatoday.com/money/economy/housing/2005-06-16-home-construction-rises_x.htm

NYT: "Market Place; Those mortgage-backed derivative securities are about dead in the water." 4/12/95 http://query.nytimes.com/gst/fullpage.html?res=990CE0DC1438F931A25757C0A963958260



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