Why Isn't Housing Recovering?

From Annika Eberle:
http://finance.yahoo.com/loans/article/110892/why-isnthousing-recovering?mod=loans-home

I think this article is interesting because, personally I haven't read anything about the real estate market since the crises hit in 2007/2008. It is interesting to see that investor sentiment turned from absolute optimism that housing prices will be ever increasing, to persistent pessimism and hesitation to get into the market, which is currently still the case according to the author and which makes perfect sense. The author also mentiones that although monetary policy easing took an aggressive approach, which was expected to have a positive influence on the housing  market, this still has not had a significant impact. This shows us just how much investor sentiment really does have an impact on pretty much any market!
Another fact I thought was interesting is that Fannie Mae and Freddie Mac are now seeking to maximise their profit because the crises depleted all their capital, and that this strategy is in fact making it more difficult for people such as small business owners or investors to get funding because underwriting rules have been drastically tightened or of penalties that have to be paid on mortgages that lie beneath a certain rating. To be noted is that these people are 1) a source of employment for the economy as well as a driving force behind housing sales. Quite a few aspects with relation to the housing market are addressed in this article, I just took two that i found specifically interesting. Please feel free to add some things on! :)


Very interesting contribution - the housing market in United States remains a very big indicators that things are not yet right and why. In the lectures we have talked about the importance of banking sector balance sheet in explaining the strength and duration of the crisis - the article shows another example of that.