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Home prices are the lowest in a decade. How can the economy recover?
April 25th, 2012
03:45 PM ET

Home prices are the lowest in a decade. How can the economy recover?

FROM CNN's Jack Cafferty:

Home prices are at their lowest in a decade.

The S&P/Case-Shiller home price index of 20 cities shows an average decline of 3.5% from a year ago. That puts home prices at the lowest since November 2002. Experts say foreclosures and other distressed property sales are the main challenge.

Some of the hardest hit housing markets include Atlanta, Charlotte, North Carolina, Chicago, Las Vegas and New York.

The worst is Atlanta, where prices fell more than 17% year-over-year. Home prices in Atlanta haven't been this low in 16 years.

These numbers are scary:

For many Americans, their homes are their biggest asset. It's hard to imagine how the nation can manage an economic recovery with the housing market still hurting so badly.

And things might not improve for a long time. A very long time.

Yale University Economics Professor Robert Shiller says a total recovery of the housing market may take a generation. Shiller says he worries "that we might not see a major turnaround in our lifetimes."

And it's not just home prices that are suffering. A new government report shows new home sales dropped 7.1% in March to the lowest level since last November.

There's just no rush to buy. Mortgage rates might be at record lows, but if people don't have the money to buy it doesn't matter. Add in high unemployment along with high gas prices and uncertainty about the health of the economy and the future of housing looks pretty grim.

Here’s my question to you: Home prices are the lowest in a decade. How can the economy recover?

Tune in to the Situation Room at 5pm to see if Jack reads your answer on air.

And, we love to know where you’re writing from, so please include your city and state with your comment.

Posted by
Filed under: Economy • Homeownership
soundoff (104 Responses)
  1. Paul From Round Rock, Texas

    Bring back all the jobs outsourced by Romeny and others. To buy houses change houses or buy new ones you need a good income.

    April 25, 2012 at 1:14 pm |
  2. Herman Portland OR

    The current regulations on the banks are hindering the housing recovery. We need to create jobs and get the government out of the auto, housing and banking and health care industries.

    April 25, 2012 at 1:16 pm |
  3. JD in NH

    I'll say it again: corporate patriotism. Apple, for example, is sitting on mountains of money, yet they continue to outsource the manufacturing of the most popular devices used by Amercans. The economy will never recover until the country is put first and greed is put second.

    April 25, 2012 at 1:17 pm |
  4. Loren

    Job creation. There was a CNN article on Chinese companies moving manufacturing jobs back to the U.S. That's a start. Maybe having a President who believes that it is not a crime to earn lots of money from business would help as well by creating a political environment that favors free enterprise rather than one that favors government expansion. Any economist can tell you that after a point government funding efforts are counter-productive, and we have been past that point for a number of years. Time to favor business over government.

    April 25, 2012 at 1:22 pm |
  5. tom Bulger, Canandaigua, NY

    The Congress could speed up the recovery by passing the President's original stimulus package and his original jobs plan. No filibuster, no amendments, no cuts, no delay of any kind.

    April 25, 2012 at 1:28 pm |
  6. Russ in PA

    So what? Housing prices should have been allowed to fall in the first place, at which point more people could have bought them. Intervention in an attempt to keep prices high – and bubble prices at that – is a good part of the reason that housing is still a shambles, and will remain so as long as the government attempts to control the market. When are you guys going to catch on that central bank-sponsored bubbles crash and need to be liquidated?

    Ron Paul in 2012...

    April 25, 2012 at 1:34 pm |
  7. Bill of New Mexico

    So many things have to be reversed:

    Get out of debt. Can that be accomplished. Apparently not.

    Repeal every trade aggreement since NAFTA–that H. Ross Perot warned us about. Obama has made his share of trade agreements. Romney won't repeal them. It won't happen.

    Stop companies shipping jobs overseas. Neither Obama nor Romney will do that.

    Pull all military home. This won't happen.

    Well...we may get a recovery, but it will be weak; and the next recession will be a real BEAR!

    April 25, 2012 at 1:36 pm |
  8. jk in MN

    Without bringing back jobs to this country that support the middle class, it's going to be tough for home prices to recover. If you think about it though – the home prices were over inflated before the bubble burst in the last term of the Geo W Bush Admin.

    April 25, 2012 at 1:38 pm |
  9. John from Alabama

    Jack: The lower the unemployment rate goes the better the nation will be. Home prices are not the best indicator of a good economy, but rather the less personal debt each individual possess is better. We are paying off our credit cards, and the amount of college debt will start to drop soon. New housing starts or the number of building permits issued tells a better story of the economy. The more vacations this year will speak volumes on the economy.

    April 25, 2012 at 1:38 pm |
  10. calaurore9

    Europe is cratering, China beginning a slide. Jobs will be brought back to the U.S., and housing prices will again rise.

    Carol in Northampton, Ma

    April 25, 2012 at 1:39 pm |
  11. Noel Sivertson Roswell NM

    The first step is providing people with jobs, even government subsidized jobs like teaching, police protection, fire protection, and infrastructure repair, to get money in their hands. People have to have money before they can even think about buying homes. You're putting the cart before the horseJack.

    April 25, 2012 at 1:40 pm |
  12. Mel - Houston

    Who care about housing prices. Non one has enough money to buy one anyway. As for the economy that will not fully recover until we get back some of those outsourced job we sent to the rest of the world.

    April 25, 2012 at 1:45 pm |
  13. Jenna Roseville CA

    Home prices are the lowest in a decade. How can the economy recover?

    JOBS Jack. Putting Americans back to work is what is going to turn the economy around. And since the Republicans have blocked job creation, putting their party before Americans they are suppose to represent they should count on losing their own jobs in November.

    Who in their right mind would vote for someone who cares nothing about them or their families. The party of NO is going to be the party of FEW and Democrats are going to get that Super Majority that is needed to get the job done!

    Jenna
    Roseville CA

    April 25, 2012 at 1:45 pm |
  14. Doug Ericson

    If you think Home prices are low now wait a couple of more years. Prices for homes now are one hundred times more than in the sixties. The 40 thousand dollar Manchester By The Sea, MA., Estate in the sixties is now a 4 million dollar home. Bill Clinton and Congess encouraged this bubble by allowing Wall Street to sell pooled Mortgage Securities. Clinton's economy was a Ponzi Scheme, and we will be paying for it for decades if not centuries. This situation is complicated further by the fact, that the taxes raised according to the Real Estate valuations, go to pay the salaries of many public employees. That is why your property taxes will probably go up even as the value of your home decreases. There are some areas in the country where prices have not fallen much if at all yet, like some suburbs close to some big cities. The government has been applying band aid solutions to keep the roof from caving in on the Housing Market but it will cave sometime soon. When it does you will know it, it won't be pretty. Doug, Pepperell, MA.

    April 25, 2012 at 1:48 pm |
  15. Don Desaulniers (Belleville, Canada)

    Any appearance of recovery will actually be illusory, based only on obscene deficit overspending. There cannot be any real recovery until the annual deficit is eliminated and the 15 trillion dollar accumulated debt begins to be reduced. That will entail serious and immediate government cutbacks in spending, which will inevitably depress the numbers for a while. The dilemma is that absolutely nothing will happen until after the November election, and even then nothing will occur unless one party or the other wrests total control of the presidency and both houses of congress. It appears probable that November will again result in a split electorate and that gridlock will ensue for another four years. Gridlock and recovery are mutually exclusive. Sorry to rain on your party, but more difficult times are ahead.

    April 25, 2012 at 1:51 pm |
  16. Bizz, Quarryville Pennsylvania

    Jack I listen to frontline last night on PBS. They explain very well just how close we came to a depression. I think it will take a lot more than just three years to expect the housing market to improve. There are signs in certain areas of improvement which is remarkable considering what Wall Street did to destroy the housing market. Just look how many years it took for the United States to recover after the Great Depression. This is not a Great Depression but it was the closest this generation ever came to seeing one.

    April 25, 2012 at 1:52 pm |
  17. Chandler in Rockaway, NJ

    Put people back to work, Jack. People with good jobs buy houses. Demand in housing raises prices. Why is this so hard to grasp? Deficits don't matter. Debt doesn't matter. Jobs are all that matters.

    April 25, 2012 at 1:54 pm |
  18. gg

    when you have 1980 wages and 2012 profits, who can afford a house or anything else

    April 25, 2012 at 1:56 pm |
  19. Kevin in CA

    Jack,
    News flash – there is no recovery. This is a permanent reset in the standard of living and income of the average American. Get used to it ... declining that is.

    April 25, 2012 at 1:57 pm |
  20. Michael Bindner, Alexandria VA

    The economy recover once people who can still afford their underwater mortgages can get principal reduction in order to sell and buy a bigger house for what they are paying for their underwater home. Freddie and Fannie can be sold to the Federal Reserve for the book value of the asset (to honor the GSE bond holder gaurantee) and then write down the principal balances to market, directing servicers to adjust the loans accordingly (with clawbacks for those who sell later). Once people who can afford to start moving up, everyone will be able to both buy and sell and the price will go up, although not to pre-Depression levels – which don't jibe with income levels. The only other option is wage inflation.

    April 25, 2012 at 1:58 pm |
  21. Brad, Portland, OR

    They need to stop with all these mortgage "forgiveness" programs and just let the chips fall where they will. The government shouldn't be bailing out homeowners and banks for their foolishness and irresponsibility.

    If houses get foreclosed on, they get foreclosed on.

    With a big supply of houses for sale, the prices should come down even more, and first-time buyers will be able to get into the market, and people who have low-end houses will be able to move up to nicer ones.

    Eventually, if the houses are priced right, supply and demand will clear up the backlog and we'll get back to a normal housing market.

    Yes, banks will take a loss when they resell foreclosed houses. That's the price they pay for not doing due diligence on the borrowers when they wrote the loans. You don't lend money to people who can't pay you back.

    Yes, people who lose their houses will have to be renters for a while. That's the price they pay for getting in over their heads on houses they couldn't afford. No matter how crooked the banks were, they knew what the houses cost and they knew what their income was... if they couldn't afford the house, they should have said no to the banks.

    But at least then the guilty parties will pay for what they've done, and not the general American taxpayer.

    April 25, 2012 at 2:04 pm |
  22. Ted

    VOTE for someone who is good at making money , and not someone who is good at spending money, ( or doing the slow jam ). Giving away the store will get you votes,but what happens when the store is empty. . . .

    April 25, 2012 at 2:09 pm |
  23. Julia, Fayetteville, NC

    Right now, there is no difference between a Republican and a Democrat. Republicans launched the Iraq War, the Afghanistan War, and free drug program for Seniors KNOWING FULL WELL none of the three was funded. Democrats bought off on all three. IF WE HAD a real conservative Republican leader or a Democrat leader to make some decisions, a whole lot of things would change and housing along with it. IF WE HAD just a hand full of legislatiors, we could have some confidence. All we need is a hand full of Democrats and a hand full of Republicans to reach across the aisle.

    April 25, 2012 at 2:11 pm |
  24. Ken in Pinon Hills, California

    Spend a few trillion on defense, entitlements, state grants, pork barrel, and you name it, like we did for decades. Isn't that what made us the richest country in the world, or am I missing something?

    April 25, 2012 at 2:12 pm |
  25. Rich McKinney, Texas

    The only way America is going to recover is for more jobs to be created here in America. A lot of jobs. The alternative is for the Chinese to move in and start buying up all this real estate and these cheap houses and then to destroy the houses and build industry where they were. Foreign governments own about half or 46 percent of Americas debt of over 17 trillion dollars. When America can no longer repay it's debt they will foreclose.

    April 25, 2012 at 2:13 pm |
  26. David of Alexandria VA

    How? Geez, Jack, this represents the best buyinjg opportunity in decades. When the market gets low enough and the forclosure clouds on titles move away, people will start buying again. One of my neighbors had his house purchased last week for more than the asking price - and he had two bidders. In efficient larkets, you need to now when the glass that seems dismally half empty is really happily half full.

    April 25, 2012 at 2:17 pm |
  27. Dave, Orlando, FL

    I assume you are talking about the economy that normal people are swimming in as opposed to the economy of the wealthy, which is just fine. The only way for there to be a recovery for the rest of us is for the wealthy and corporate America to give back what they have stolen from the average Joe. Then we have to change the laws back to what they were before it was legal to steal from middle Americans. Don’t hold your breath.

    April 25, 2012 at 2:19 pm |
  28. JM from DFW

    Business need to create job opportunities in America by investing in America.
    When more people are employed, we receive more tax revenue and pay less on entitlement programs.
    Our economy will recover when we invest in our own future.
    Chrysler, Ford and GM are growing jobs! (Obama's approach)
    If American Airlines is allowed to kill the union more jobs will be lost. (Romney approach)
    297 million people can create more job opportunity than 3 million.
    When our focus is on the 297 million, our economy will recover.
    Keep reducing government and include school systems.

    April 25, 2012 at 2:22 pm |
  29. Leta

    HURRAY for those who has lots of cash – they can buy one or two houses this time and sell when economy recovers.
    Economy will improve if America will re-elect Pres. Obama and get rid of the Party of NO.
    Vote all Democrats!

    April 25, 2012 at 2:25 pm |
  30. Kim , Dodge City, Ks

    Housing prices are probably closer to what their value should have been, if, you took out the decades of artificially inflated prices created by wild speculation and de-regulated finance practices. We have become so accustomed to tying the health of the economy to unrealistic "bubbles" and financial schemes, that we believe a stable, controlled growth is not good enough. The sad truth is that property taxes never reflect the market value.

    April 25, 2012 at 2:35 pm |
  31. Mark from New Jersey

    Its easy to get the economy to recover, except the steps to do it will never be passed by this corrupt and bought- off congress. Term limits, a ban on lobbying, public rather than private funding of elections. A fair trade policy would also be nice, where we don't wind up outsourcing manufacturing. A tax structure similar to the one we had in the fifies (you know, when we built stuff like highways and bridges) that benefitted all Americans. That way we would build the middle class which benefits everyone, not just the 1/10th of 1%. They tried austerity in Europe and Great Britain, and they're sliding back into recession.

    April 25, 2012 at 2:36 pm |
  32. MNResident

    The FIRST thing to do is to quit having the government attack legitimate businesses. The old saying goes, "To make an omlette, you have to crack a few eggs". You have to cut down trees to get wood. You have to drill and dig to get natural resources. Our economic omlette can't afford to have us stand around and watch the eggs go rotten as we contemplate the majestic natural wonder of it. Nor can we afford to have a government attack the omlette makers in our country who are putting the economic eggs on our table.

    April 25, 2012 at 2:39 pm |
  33. Pete in Georgia

    The economy can and will recover when we get a new President that understands and promotes FREE ENTERPRISE, that understands that Big Government..................taxes and regulations..................are POISON to our economic well being. A new President that promotes personal earned financial growth, not government hand outs from cradle to grave based on a hatred and jealousy of financial success. No more class warfare, preaching the nonsense that just because you happen to be in America you somehow deserve financial entitlements at the expense of hard working producing citizens. A new President can turn this foolish hatred of success around and set the tone to a "Working America", the kind of country that succeeds.
    The lies and deceptions must be buried.
    And they will be.

    April 25, 2012 at 2:40 pm |
  34. Ed from California

    First of all, Jack. The family home is not, and was never intended to be a piggy bank. My parents home was paid off, this home is paid off. So, they never used it as a source of income. Now, in 1999 and up to 2008.....folks needed a new Range Rover, home theater, bigger home, new backyards, swimming pools, trips to Disneyland, $10,000 flat screens and the endless need of surpassing the Jones. But, who got rich? Wall st hedge fund managers, Banksters, Real Estate salespeople, Loan Officers, ect...ect...ect... These knuckleheads bought into this hype of easy money w/low interest rate of 5yrs only to find that the rates went up....it was, "What happened? It was crash and burn, is what happened. We bailed out the crooked banks and Wall st. Only to see where the mop flopped is the new normal, What the crazy part was, no one had a job in the first place that could support a $200K home, much less than a $500K home w/seconds and thirds attached to it. Good job, Robert Rubin, Sandy Wyle (CITI Group) and you too, Clinton for doing away w/ Glass-Steagall...there was a reason it was implemented by congress after the '29 crash......it was that Wall st and the banks couldn't be trusted.....and again, they proved it right. Mr. Boehner, "When are we going to get our Retirement and 401(k) losses back?? I guess after you create 40 million jobs!! Welcome to the... "New Normal"!!

    April 25, 2012 at 2:41 pm |
  35. Jen seattle wa

    Focus on Different area of economy, it was never moral to allow wall st or banks to skim every persons house then act like things are bad when They(wallst) Report revenue they shakedown citizens for has slowed...Focus more on why banks wont give access to capital to buy materials and toolsvto allow individuals to build the 20 million houses needed without parasites trying to make money off someone elses labor..If you build your own home you shouldnt be punsished by wall st banks and u.s. govt claiming that not enough non workers got to pocket money off your hard labor.

    April 25, 2012 at 2:45 pm |
  36. Rich McKinney, Texas

    Right now our interest payment the first half of 2012 on the federal debt was 104.413 billion dollars. The total federal outstanding debt is 15,620,174,049,560.23. Our federal government does not lower the federal debt and increases it each year. Knowing these facts tells me that we are not going to recover any time soon no mater what fantastic promises of grandeur Obama or Romney promise. The debt only gets larger each year.

    April 25, 2012 at 2:51 pm |
  37. Ralph Spyer

    When you go to sell your home ,it worth 25 % less than you thought it was worth. Now the good part of the picture is the home you buy is 25% less than is was in 2008. Home prices are just one aspect of the economy, the stock market is on the up side, Americans car companys are building a better cars, my I phone is kool , the wars are ending, and Mitt is not going to become president.

    April 25, 2012 at 3:00 pm |
  38. Michael "C" Lorton, Virginia

    Jack: I wish I had an answer--everybody seems to have the answer--but it is not working.

    April 25, 2012 at 3:06 pm |
  39. Jane in CA

    There are lots of contractors and real estate people in SoCal buying up lots of houses cheap, fixing and upgrading them, and reselling at higher price points. One of our neighbors is in construction. When he doesn't have work, he works on fixing up his own house. Lately he is working so much he can't get his own projects finished. Lower house prices mean that new buyers will have more money to spend on other things, spreading economic growth through several areas, not just home builders. High growth rates are not sustainable. You would think that we would have learned that by now.

    April 25, 2012 at 3:07 pm |
  40. barbara in nc

    Well - they could start by passing some of the common sense jobs bills (infrastructure mostly) that President Obama wanted.

    April 25, 2012 at 3:10 pm |
  41. bonnie from NJ

    I don't know how it is going to recover. I sincerely believe that no one in Washington cares one iota that we are suffering out here with no jobs, declining house values, food and gas prices rising. The only thing they notice is that some people have to go on food stamps now and that is ruining the economy. But they and their friends are doing just fine, the sales at Lexus and Saks 5th Avenue are up up up. I consider myself lucky that at least I still have a job and my house has not reached the point where I am upside down.

    April 25, 2012 at 3:18 pm |
  42. Gary in San Jose, California

    We have millions of homes in foreclosure, millions of homes under water, and high unemployment while the government spends over a trillion a year more than it earns. Why would people think some magical painless recovery is just over the horizon when we have these problems and a national debt above 100% of GDP? We screwed up big time and the fix is going to hurt.

    April 25, 2012 at 3:23 pm |
  43. Bob Kansas City, Mo.

    Jack, I agree with Romney on very few things but one thing he said months ago stood out to me......"you fix the jobs problem and most of our other ills will right themselves in a matter of months". I guess that was the cue for those that call the shots on hiring to get with the program.

    April 25, 2012 at 3:29 pm |
  44. Ralph in Oklahoma

    With low home prices, of course. What better incentive for an economy-bashed populace to aspire to than an American dream again with reach?

    April 25, 2012 at 3:30 pm |
  45. Steve, Clifton, Virginia

    With China beginning to ship more and more of their manufacturing functions to the U.S , perhaps the employment of U. S workers to work in those Chinese manufacturing plants will enable U. S Workers to afford the more affordable housing and then perhaps the U. S economy will start to recover in a more robust way. After all, we need to repay to enormous loans back to the Chinese.

    April 25, 2012 at 3:32 pm |
  46. Dan in Albuquerque

    Give the Democrats power in November and we will finally get some job bills passed. Jobs equal new houses for workers.

    April 25, 2012 at 3:33 pm |
  47. TomInRochNY

    As long as management insists they earn most of the profits, the American economy will not recover. As long as workers have to work two or more jobs just to stay even, the American economy will not recover. As long as politicians are gutless pawns of the wealthy, the American economy will not recover. As long as we ask questions for people to blog about and do nothing to change our world, the American economy will not recover.

    Tom, Rochester, NY

    April 25, 2012 at 3:34 pm |
  48. Kyle S Irvine, CA

    Well Jack unemployment will have to go down first. Everyone is watching the rising unemployment numbers to see how the economy is doing. The sad thing is nobody is willing to admit just how bad it really is. The 8% unemployment rate is really 11-13% but no politician has the courage to say it.

    April 25, 2012 at 3:36 pm |
  49. Gerry

    The economy and the housing market will recover as soon as you get the federal government out of the way. The economy is already recovering at a very slow pace in spite of Washington. With no government participation the economy will eventually recover. A one month government shutdown would probably be the best stimulus package the economy could ever get.

    Gerry
    Ash Fork, Az.

    April 25, 2012 at 3:40 pm |
  50. Thom Richer

    Fairer and higher wages for the working man and woman. Lower interest rates for home loans and especially student loans. It is a sad fact that banks and other loan institutions will give a car loan for 2% or less for a product that depreciates from day one and each day and in all actuality is not an "investment" at all Yet will not "invest" in the most profitable and most secure product our country has...our children. Student loans, past, present and future should immediately be rendered interest free. However, let us not forget the fastest, most sensible and most critical way to economic recovery that is needed today...end our wars.

    Thom Richer
    Negaunee, MI

    April 25, 2012 at 3:43 pm |
  51. Bill

    Prices of homes were artificialy maintained much too high relative to their real value. As we all know that situation was
    man made by greedy banks, etc. It wiil take time, of course and probably Federal and State aid before the situation
    improves.

    April 25, 2012 at 3:45 pm |
  52. DT - Saint Paul, MN

    That's just it Jack, there is no recovery. The housing prices falling are a result of a bubble bursting, not some ordinary slump. It was a correction. I don't know what it will take to get people to wake up, but it looks like even this didn't do it. This was a massive reorganization of wealth from the average home owner to the investment banker. But God forbid we suggest this process be stopped, or even reversed.

    The next big thing will be the credit bubble. What do you think all those re-finances were propping up?

    How can the economy recover? It can't. The people in charge are the ones wrecking it.

    April 25, 2012 at 3:52 pm |
  53. Frank

    The economy cannot recover until the inventory of foreclosed and underwater homes has been reduced to pre crash levels. But it's hard to sell a house that has a property tax burdem that is significantly higher than the sale price. When the economy adjusts to these less expensive properties, the economy will recover. Buy now and save America!

    April 25, 2012 at 3:53 pm |
  54. Gigi Oregon

    Really Jack, only 92% of us have jobs. Sooo...we are all just supposed to lay down and give up... It would be nice if 100% of us was in a good paying job. But it will never happen in the United States, the center of Capitalism...that's what we all brag about here. We are all free to capitalise on our neighbor, friend, family, customer and government. So back off and stop blowing everything out of proportion. The trouble is some people don't understand what freedom means in the United States. We are free to Capitalize on each other and not go to jail.

    Our gas prices dropped this week over 5 cents a gal. Bank and mortgage companies will have to clean up their act before they will be trusted. Many of us have moved to local credit unions that offer better rates. and less years which means better savings in the long run. There is an old southern proverb "fool me once shame on you, fool me twice shame on me. I drove my kids crazy with this biblical proverb "You will reap what you sow"...And that goes for Capitalization also.

    April 25, 2012 at 4:03 pm |
  55. Martha Brooks

    Home prices will go up when houses begin to actually SELL. Houses will sell when the banks start lending money again. The "bail out" was supposed to address this problem. Hah! They took the money and sat on it instead of spreading it around to actually jump-start the housing market and economy in general. Watch the movie "Too Big to Fail!"

    Martha, Rew, PA

    April 25, 2012 at 4:10 pm |
  56. curtis in philadelphia

    Jack, who says the powers that be, the plutocrats, want it to recover, they're doing just fine. Now shut up and eat your cake.

    April 25, 2012 at 4:13 pm |
  57. Gary H. Boyd

    Living in Arizona for the past 35 years I've seen the rise and fall of home values up close and personal. Arizona, Florida and Nevada were but 3 states impacted BIG TIME when the market folded a few years ago. BUT, contrary to the nay sayers, Arizona is seeing genuine improvement in the past year. I don't think the situation's as bad as some make it out to be.

    Gary in Scottsdale, Arizon

    April 25, 2012 at 4:17 pm |
  58. Larry,Springfield,Ohio

    If President Obama would resign,the economy would soar!!

    April 25, 2012 at 4:24 pm |
  59. Pete in Florida

    Home prices are low because sales are low because too many potential home buyers don't have jobs that are secure enough and well-paying enough. In other words, same answer as before – it's gonna take LOTS of good payiing secure jobs to pull this economy out of the ditch.

    April 25, 2012 at 4:25 pm |
  60. Sandstone.

    "So you think you can afford to keep it for more than a year?? If not don't waste your money! It will be ther upkeep that will kill you!"

    April 25, 2012 at 4:28 pm |
  61. Ray in Knoxville

    Jack, the housing bubble was artificially inflated way beyond what it should have been because a small number of people were making a huge amount of money and it made people in Washington look like they knew what they were doing. Unfortuanately, no one bothered to pay attention to the man behind the curtain or they would have seen that it was all smoke and mirrors.

    April 25, 2012 at 4:29 pm |
  62. MARK, OKLAHOMA CITY

    What? Now your viewers are supposed to be economics professors? I think Obama or Romney should be answering this question, Jack.....not us.

    April 25, 2012 at 4:30 pm |
  63. Larry In Houston

    Home prices are the lowest in a decade. How can the economy recover ? Good Question, Mr. Cafferty.
    Answer : Let me give you a hint : (how about "JOBS ") When Factories & Manufacturing Ever Comes Back, ( which I doubt if it ever will) ( it's too late for that, now days) People will start BUYING & Purchasing Houses, & Homes, period. When George Bush quoted several years ago : "small business creates jobs" I knew from that direct Quote, he was Lying to the american people, and a lot of them took it, hook/ line/ & sinker. We are Now Finding Out That It's the Manufacturing & Factories that Employs Thousands & Thousands of People, That Creates Jobs, Not the barber shops, beauty shops, mom & pop convenience stores, clothing stores, and whatever Else You Can Think Of, that only employs 10 people or 3 people, or 20 people , or 2 people. That's NOT what Creates Jobs !! The Malls & Fast Food doesn't Create Jobs ! I used to Work for a Factory that employed approx.600 of us. (and it was a small factory)

    When Manufacturing & Factories with Thousands and Thousands of People employed, This Is What Creates JOBS. When This Starts Happening, People WILL START BUYING HOUSES. (not minimum wage or above min wage jobs)

    April 25, 2012 at 4:30 pm |
  64. deborah ballweg Seibert, co

    America has to stop bickering between factions and get back to work. Elect Mitt Romney

    April 25, 2012 at 4:31 pm |
  65. Paul in NC

    The economy is already recovering, albeit very slowly. The housing situation is certainly an obstacle but not an insurmountable one. Once the foreclusre inventory has been sold off there will be a demand for homes. New construction will continue to rise in cost and price so the demand will focus on resales. When this hsppens prices will rise accordingly and the market will return to normal. In most situations the doomsayers are usually wrong. The turnaround won't take a generation. It may already be starting. People have to live somewhere.

    April 25, 2012 at 4:32 pm |
  66. Roy Birdzell

    By applying Economics 101. Lower or do away with corporate taxes. Minimize regulatory regulations and compliance to the basics and efficient compliance reporting. Moderate Union work rules for innovation, employee efficiencies, and integrated business technologies. Develop internal energy resources to furnish businesses with inexpensive energy supply. Let free enterprise flourish within minimum government intrusion. We know that government enabled societies simply do not work. They have all failed sooner or later. The only beneficiaries of such models are those that manage to create and govern them till they eventually collapse. If we would lower and, or do away with all the costly US government imposed taxes and regulations, businesses would flock to this country. The US has by far the most capable work force in the world and the most stable society. Lowering the major cost factors of doing business here in the US would then allow some leeway to have higher salaries than elsewhere in the global economy and still be globally competitive. All we have to do is get the enabling politicians out of the way and exercise just good common sense.
    Roy – Jacksonville

    April 25, 2012 at 4:32 pm |
  67. Mr. D

    I always wanted to live in a tent city. Looks like we all will eventually have that opportunity. I wonder if Romney or Obama will allow pitching tents on their lawns.

    April 25, 2012 at 4:33 pm |
  68. Michael, from Smiths, Alabama

    To quote a line from a comedy movie, "Hold on to yer lug-nuts, its TIIIIIIIME for an overhaul!" That's exactly what is needed.

    April 25, 2012 at 4:33 pm |
  69. rex in portland, oregon

    This economy is based upon two fallacies: trickle-down works, and growth is paramount.

    It is obvious to all thinking persons that reaganism does not and has not worked. We are now seeing the end results of over production, over selling, under regulating, unrestrained capitalism. We see it in the distorted tax structure, We see it in the trillions of dollars firmly lodged in the apex of the economic triangle – the richest. We see it in the destruction of the middle class as the driver of the economy. We all feel the return of feudalism, whatever it is called by the propaganda of the oil companies. We see it in the destruction of the environment for the enrichment of the few. We see it every day that we turn on television in the "ads" by the power suppliers – millions upon millions of dollars spent trying to convince people that only by continuing to rape and pillage the earth can we exist. It is a form of insanity.

    As for growth – the limits of growth are the most obvious of all things, but are being totally ignored in favor of instant profits and greed. The planet and its people are paying in pain and poverty for the few who are in control.

    So, Jack, put an end to this stupidity, institute some rules for everyone to follow and enforce them. If the rules are just and all benefit equally from the vast resources of this earth, the economy will stabilize. Until then we shall continue to have profit making cycles, continue to deplete our resources, continue to contaminate this planet, and continue to deal pain and suffering to those who cannot combat the kings and earls. .

    April 25, 2012 at 4:37 pm |
  70. Manny in Roseville, Ca.

    States SHOULD have more of a say, but in the interest of decorum and decency would it be asking to much to say it without sticking your finger in the chest of the President of the United States of America on a tarmac?

    April 25, 2012 at 5:02 pm |
  71. Ed in California

    Home prices are reflective of unemployment. We need jobs, and not the Solindra here today gone tomorrow funded by our taxes jobs. Problem is, the US really doesn't have that much of a manufacturing base to provide decent jobs to low skilled or semi skilled labor. Here you are either a Doctor, Professor, Scientist OR you work at Burker King, Mickie D's or a cable news network.

    (sorry Jack no offense meant, just could not resist that last comparison...we love 'ya). 🙂

    April 25, 2012 at 5:09 pm |
  72. firstborn1945

    Banks were bailed out with tax dollars while homeowners (who paid the tax dollars) were left holding the dirty laundry. If homeowners had received the bailout, banks would have their money, most homeowners would be still working and living in their homes. It is a shame we do not realize the prosperity in this country comes from the 80% working for and buying from the 20% (the trickle down theory never worked). What a shame.

    April 25, 2012 at 5:18 pm |
  73. Michael in Baldwinsville

    The economy can't until people earn high enough wages to afford to participate in the consumer markets without debt. Until that happens, homes will be the hardest hit by the economic recession.

    April 25, 2012 at 5:18 pm |
  74. Myth

    Well, we could listen to the proposals of Ron Paul and have a chance at fixing the broken American economic system. But we'll probably get stuck with Obama or Romney and keep on the same track to failure.

    April 25, 2012 at 5:19 pm |
  75. Dale N.M.

    Hello Jack the answer to your question is. Stop the greed and stupidity.

    April 25, 2012 at 5:19 pm |
  76. Tyler Goad, Arkansas

    The economy will never recover, America is doomed.

    April 25, 2012 at 5:19 pm |
  77. Appraiser Steve

    Jack that study you quote is accurate. Its going to take our local, state and federal governments to stay out of the housing market for votes.....shame on my generation.

    April 25, 2012 at 5:20 pm |
  78. Larry -- Minnesota

    Jack, we have to arrest our lock-step climb to the pinnacle of our economy's ponzi pyramid. If we were really serious, which we aren't (just ask Wall Street) we'd start with getting rid of the Federal Reserve and the omnipresent banking philosophy that has an ever tightening stranglehold on every man, woman, and child in our Country.

    April 25, 2012 at 5:21 pm |
  79. accipiterhawk

    You mentioned a lot of different factors as to why people aren't buying houses, except for one major one – the biggest group of people in the housing market are those right out of college. Most of us have a huge amount of student loan debt. Essentially, we already HAVE a mortgage we're paying....for education. I can't even afford an apartment with the amount of debt I have, paired with a lack of good employment. Want me to buy a house? Try cutting the interest on my loans, then maybe I can contribute to the housing market.

    Brenda from Manchester, Connecticut

    April 25, 2012 at 5:21 pm |
  80. Randy

    The American consumer is 70% of our economy and ever since Ronald Reagan we have been waging a war on them. Unfair tax policy, free trade, anti-union legislation, and all (legal and illegal) immigration have killed the middle class and it's coming home to roost. Until we start legislating for the middle class, our economy, and stop legislating to the highest bidder, we will continue our race to the bottom.

    April 25, 2012 at 5:22 pm |
  81. Ed Fern

    Home prices took an unsustainable jump between 1998 and 2008 because of non-qualifying loans. If that is the "normal" we will return to, I want no part of it.

    April 25, 2012 at 5:22 pm |
  82. Ken from Long Island

    We recover by investing in education, infrastructure and the middle class. Giving more money to rich people is the way back to recession. Yesterday, Mitt Romney asserted that he should be congratulated for being rich; that his values should be the same for the rest of America. Getting rich by putting people out of work is not my formula for success. Success should not be a measure of how much you have in the bank, but what you have done to contribute to society. I have had teachers I respect more than Mitt Romney. I know military personnel I respect more than Mitt Romney, firemen, policemen and just plain decent people doing the best they can. The time for boom or bust is over. The time to give rich people everything they want and pray that some of it trickles down is over. Now is the time for the middle class to assert its values and put that stamp on America.

    April 25, 2012 at 5:23 pm |
  83. Guy, North Bend,Or

    I see it the other way. Home prices are only the worst in decades if you are trying to sell and make a profit. It's one of the best markets you have ever seen if you are buying. Who's side are you on? Go get em new buyers.

    April 25, 2012 at 5:23 pm |
  84. Yuri from florida

    Why is there a false belief out there that corelates success of people with ability to own a home? You do not have to have a home to have a job, you do not need to live in a big home, you could live in a room if you really had to. You can live in a tent. Whether home prices are rising or falling should have no impact of livelihoods of people. If you can not afford to buy a house then you should not buy one. Simple as that. Renting prevents you from housing market fluctuations and results in no headaches of having to pay home taxes, having to abide by home owner associations or otherwise. Better yet... move back with your parents. What is the harm in that? Most of world's people live together as families and they get by somehow. Can we now concentrate on more important question Jack? Why has housing market become a tradeable commodity among people and why house prices are expected to go up? There is nothing in your home... once built and or upgraded that should mysteriously cause your house of $150,000 to sell for $2 million 2 years later.

    April 25, 2012 at 5:25 pm |
  85. Larry In Houston

    Home prices are the lowest in a decade. How can the economy recover ?
    Let me give an Example as an Answer, Jack – Let me put it this way – IF you Used To have a Bath Towel in your Home that says (on the end of it) CANON – MADE IN U.S.A. What does that tell ya ? Truth be known, The Smithsonian would Love to have You Donate it to them, or else you could possibly get a huge amount of $$$$ for it, if you put it on e-bay. Hope this answers your Question, Jack. (Jobs) all people want is – decent paying Jobs Here, that's all. Is that too much to ask for ??

    April 25, 2012 at 5:25 pm |
  86. Erik in Denver

    The banks, who basically screwed the economy over by giving ridiculous loan terms for ridiculously over-valued homes, now have made it difficult to actually buy a home. Funny how that works. That combined with many people accepting the ridiculous terms that should have known better, have created a perfect storm.

    Like many people, I have great credit history and I can certainly afford to make a home payment, however the horrible economy has systematically chipped away at any prosperity that I had several years ago. I can easily make the payments, but I can't pull 10s of thousands of dollars out of my rear to actually seal the deal for the down payment and closing costs in this market - so the banks don't want to talk to me (and will make no money off me either). Thankfully we sold our last home in 2008 right before things got REAL bad, and we dodged most of the bullet.

    I'll buy a home when either the economy allows me to prosper so I can afford the banks terms, or the banks will have to sink to my level. In the interim, I'll continue to rent, and when something explodes in the house, shrug and call the landlord.

    April 25, 2012 at 5:25 pm |
  87. Flyingwolf from Manchester, NH

    raising home prices is not so much a function of the federal government, but a function of the towns and cities in which the homes sit. A good idea, from my viewpoint to raise home prices would be for town and city governments to accept that most of their residents are older people and provide the art and literary functions that most older people like to attend. Also they should provide more public transportation to make it easier for everybody to get back and forth to work or shopping w/o a car. Neighborhood grocery stores (w/fresh produce) would be helpful also. Neighborhood grocery stores have disappeared from my area so if I want fresh produce I have to grow it myself (which I do) or drive 8 miles to the nearest supermarket.

    April 25, 2012 at 5:26 pm |
  88. Name*Robin

    So much doom and gloom. The current "depressed" housing market has enabled several young adults in our family to buy homes that were previously priced way out of their range. Maybe THIS is where the prices should always have been. There is a bright side to the bursted housing bubble.

    April 25, 2012 at 5:27 pm |
  89. Danny Los Angeles ca.

    Jack,Americans have always been one pay check from renting or the streets.as costs have out paced salarys this is where we are we need to look at this two way though as oppertunity for our children now to buy homes they otherwise couldn't I live in California and before this crash my kids never even considered buying here.the way out of this is for corporations to hire at decent pay let salarys catch up with living costs.corporations and banks are the only thing standing in Americans way to a better life.this war between labor and management are killing us this is how they punish us for their greedy ways.

    April 25, 2012 at 5:28 pm |
  90. Pat in Canada

    My home is where I live. It provides my family with shelter and comfort. Therin lies its value. To speak of its value in financial terms would only be relevant to me if I was looking to borrow against my equity – a "habit" that has constributed to the financial crisis. A decrease in home prices is probably a good thing.

    April 25, 2012 at 5:29 pm |
  91. Josh P

    Ron Paul is the answer he wrote the book on it & predicted it...that simple ....from Canada

    April 25, 2012 at 5:30 pm |
  92. dfruges1

    Jack: 1. Keep people in their homes with a reduced mortgage even if the bank has to take a loss. Remember who started this mess with bad mortgage admin and "robo-signing". 2. Knock down all the empty homes out there right now and reduce the excess home inventory depressing home prices. 3. Form a coalition of Fed., state, and local gov't with builders to build a new replacement home for the empty home that was knocked down. Keep the same home style for the neighborhood – Cape Cod replaces a town down Cape Cod. That will also drive the economy with some new jobs at Amana, Mohawk Carpets, GE, etc., etc.

    Dom in Jersey / South Brunswick, NJ

    April 25, 2012 at 5:31 pm |
  93. Steve

    That question has a fairly simple answer. Put more of the wealth in the hands that will spend it! The middle class needs good jobs and wage increases. They will spend the economy out of lethargy and into a job producing, prosperous, economy that will benefit the rich, poor, and middle class. The real question is will our leaders stop pandering to the rich who buy our government with campaign donations and do what is best for everyone? I doubt it.

    April 25, 2012 at 5:31 pm |
  94. Fernando from dallas tx

    The answer is simple. Get a president that can actually do someting for a change instead of giving good speeches.

    April 25, 2012 at 5:33 pm |
  95. John

    In light of the present financial crisis, it’s interesting to read what Thomas Jefferson said in 1802:

    'I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.'
    Deregulation let the Bankers loose.

    April 25, 2012 at 5:33 pm |
  96. Name*Z

    The soulition to the US housing trouble is to take the greed factor out the equation. Everyone wants to own a home and most potential home owners only lack enough money for down payments and closing cost.
    The soulition is to allow Americans to become home owners using Real Estate Installment Sales Contracts.

    April 25, 2012 at 5:35 pm |
  97. anthony from Savannah

    Here's my solution to give housing AND eventually the economy a jump start,as much as people want the government out of their lives,this is what the gov can do ,it can give each and every home AND business owner a tax break on any renovation,remodelling they can do up to almost %10 of the appraised value of the house but maybe not exceeding $ 5,000 (tax deductible ) a year for instance an estimated house value @ $200,000 ,will be eligilbe up to $20,000 in total of renovations,that can be claimed in span of 4 years,that action will encourage the existing home owners,and also investers as well to snatch up the forclosed houses, so what is in this for the goverment? it can collect more revenue from the sale of building materials from the hard ware stores???

    April 25, 2012 at 5:35 pm |
  98. Jack - Lancaster, Ohio

    Mr. Cafferty:

    Using the "economy" as a patient two of the life givers as determined by government have failed already, the bail out (an extra breath) getting the "pulse" on the financial fraudulators, and finally the "hail Mary" pass to get Republicans back in charge. The fix will not come from the top down their action will create some kind of purgatory for the public ( I hope that reference is religiously general). The public needs some kind of exsorcism to happen in the halls of government to achieve "spontaneous integrity" and then things will be okie dokie. This requires not a fix but a resurrection.

    April 25, 2012 at 5:36 pm |
  99. John Lacher

    I watched the TV special on PBS the other night about the Crash of 1929. The current economy has all the ear marks of the Crash of 1929. It is a stark reminder of how the economy got to where it is today. As the old saying goes, what goes around comes around. Financially speaking, this country has not learned how to live within it's means in the last 80 years.

    I am afraid we have yet to see the worst.

    April 25, 2012 at 5:38 pm |
  100. Jeff In Minnesota

    It's going to take along time for us to recover. The Great Depression took 10 years and a World War to create a recovery. Barring a war, it will probably take us around 10 years to recover as well unless a miracle happens.

    April 25, 2012 at 5:41 pm |
  101. A Southern Lady - North Carolina

    As the economy continues its slow recovery under President Obama, housing will also recover. Of course, that is if the President is re-elected and the House and Senate are in Democratic hands and the Tea Party nut cases, elected in 2010, are sent home. Or, if the R's themselves oust the Tea Party and again the once-proud Republican party selects legislators who are reasonable and will vote not along party lines, but in the best interests of the country and let Speaker Bohner do his job of compromise which will so benefit the country. . Then, we will return to the county that we are so proud of.

    April 25, 2012 at 5:42 pm |
  102. Mycroft Lake Travis Texas

    The Bush 2 Presidency , is the gift that just keeps giving, ain't it ? Jack. You know that I suggested this would happen as well as gasoline doubling in price way back in 1999. I'm sorry too say I was off a bit about 200% on gasoline, but make no mistake about it, I fore told of these crisis's over a decade ago. Bill Clinton's job was huge to over come Bush 1's four yea mess ,President Obama has more than quadruple mess after Bush 2's eight years in office. As I stated in 1999, I don't know if the USA will ever be able to over come another Bush Presidency, maybe ten or twenty years. If I'm lucky, I might be able to enjoy life again while my better years are past me.

    April 25, 2012 at 5:44 pm |
  103. marybeth, massachusetts

    Jack, you're asking the wrong question again today. It doesn't matter how low housing prices are if people are unemployed, underemployed, or scared about being laid off. People who aren't earning a paycheck aren't going to buy a house. People who have to work two or three jobs just to eke it out aren't going to buy a house. People who are worried about being laid off aren't going to buy house. And the banks won't lend them the money anyways.

    The housing prices have been way overinflated for too long; this drop in prices is simply the market correcting itself, and it still has a long ways to go. My folks bought their house and land in the late 1960's for $30,000. Their mortgage payment was $200.00 per month. We didn't have much (never took vacations, never went out to eat or to movies, my brother and I had hand-me-downs from older cousins, never had anything new of our own) but my folks managed for years on just my father's salary. Mom went back to work when I was 11 and considered old enough to get dinner on the table, handle the laundry, and watch my brother). Today that same house is assessed as $550,000. There were no additions, no new windows, no new doors, only remodeling done in the kitchen, and it still has the original linoleum, countertops, and cabinets. The house is 1300 square feet. Other houses in the same area have seem similar skyrocketing values. The problem is that salaries haven't kept up. Neither my brother nor I could ever afford to buy the house we grew up in, and the sad thing is that we both make more than my father did. It isn't that dad worked harder or budgeted or saved smarter. It is that salaries have stagnated since the 1970's while the cost of living (rent/mortgage, food, car, gas, insurance, education, clothing) has gone up. That means I have less to spend. I'm sure the same is true in other parts of the country. Of course, Romney could buy my folks' house with the pocket change he makes in less than a day, but for ordinary Americans, a house is out of reach.

    Get people working at decent, good-paying jobs with benefits again, then the housing market will improve. It isn't rocket science.

    April 25, 2012 at 5:44 pm |
  104. Name*Aaron in California

    Jack I agree it could take a generations time for the housing market to fix/recover itself. I believe this to be true simply based on the fact that it took a generation to make this mess it'll know doubt take another to repair the damage. In contrast to your report I live in the California's North Bay(wine country)and to this day home prices in this area are NOT falling and never really did. The average medium home in my area is still in excess of 550K plus that doesn't sound bad to me considering these very homes sold for only 150K a mere 20 years ago. The up and coming generations will NOT be able to afford these greedy and insane values on homes thus it taking a generation's time for the sanity to seep back into society. Now of course this opens the door as to why people and banks over valued their homes in the first place. Now only when real value and sanity resumes will the economy recover.

    April 25, 2012 at 5:51 pm |