June 16th, 2011
06:00 PM ET

What does it mean that the housing crisis is now worse than the Great Depression?


A long line of unemployed and homeless men wait in New York to get free dinner at the municipal lodging house during the Great Depression, circa 1930. (PHOTO CREDIT: GETTY IMAGES)

FROM CNN's Jack Cafferty:

Here's a sobering thought: A new report from Capital Economics describes the current housing market bust as, "larger and faster than the one during the Great Depression."

Since home prices peaked in 2006, prices have fallen an average of 33 percent. During the 1920s and '30s, home prices dropped 31%.

Analysts point out one of the reasons we're in worse shape today is that the boom that came before the dramatic downturn was unlike anything this country saw in the years leading up to the Great Depression. This time around millions more Americans had access to the housing market, and many of those people wound up buying homes they couldn't afford despite having bad credit, or putting little or nothing down.

Foreclosures were down last month, but that may say more about the banks than the people who can't pay for their homes. Banks have been having trouble selling the homes they've already repossessed, so there's little incentive for them to continue the pace of foreclosures.

Additional data out in the last few weeks show nationwide prices are at their lowest level since 2002. What's more, almost one-quarter of all homeowners are underwater, meaning they owe the bank more than their home is worth.

A recent CNN-Opinion Research Corporation poll found that 48% of Americans believe another Great Depression is likely to occur in the next year. Sadly, for a lot of people, it already has. There is a bright spot in all of this. It's a great time to buy a home with rock bottom prices and mortgage rates near historic lows. The problem is so few of us can afford one these days.

Here's my question to you: What does it mean that the housing crisis is now worse than the Great Depression?

Interested to know which ones made it on air?

Steve in Virginia:
During the great Depression there were far fewer people living in housing that they couldn't afford or living beyond their means. And I bet you could count the number of credit cards issued on one hand. Today's situation was created by the banks, mortgage companies and people who wanted to live the big life before they earned it.

Pete in Georgia:
Can you say "House of Cards"? Our obsession of everyone owning a house at any cost is what led us into the current disaster. Unscrupulous, dishonest, immoral lending, backed by the same kind of Congress that led America off the cliff while padding the pockets of bankers, brokers, and politicians. Sad and pathetic.

Fred in Los Angeles:
It means this President and his fellow Democrats have failed! The Federal Government can't spend its way to prosperity. I'd like to trade all these clunkers in.

Government's proper place is to be a referee between big business and the consumer, like in a prize fight. Remove the government by excessive deregulation and in come the crooks with their no money down home loans, etc. When they deregulated and did variable rate mortgages (like a stock margin call in 1929) it was predictable. This didn't just happen. It was created by bad presidential/Congressional management.

Renee in Peoria, Illinois:
It means those responsible were not held accountable. Those who fail to learn from history are doomed to repeat it. We have learned nothing and Wall Street has doomed us.

Tom in Canandaigua, New York:
Bankers were more moral in the first depression. They had personal pride and a respectable image they maintained. Today's Wall Street thought that Graham and Bush would let it get away with anything, and they did. Regulations and safe guards have been stripped away to make theft legal.

David in Florida:
I don't know what it means. I just want a list of soup kitchens in my area!!

Filed under: Economy
soundoff (106 Responses)
  1. barbara in nc

    Back then, houses cost very little and bankers were willing to take partial payments rather than nothing.

    You KNOW how it goes these days, Jack. It's all about profits for corporations and the wealthy.

    People no longer care about people and our country - it's the $$$$$$.

    June 16, 2011 at 2:07 pm |
  2. Jayne

    It means there are thieves on the loose on Wall Street. From the folks who bundled bad mortgages and sold them as a good investment – all the while betting against them – to the ratings agencies that didn't do their job, we've just witnessed the biggest heist in history. And few have gone to jail.

    June 16, 2011 at 2:07 pm |
  3. Ed from Texas

    It means that deregulation of Wall Street was worse for the economy in the long run and that its control of our government is so strong, that we still have not done anything to keep it from happening again

    June 16, 2011 at 2:07 pm |
  4. Faye from Nevada

    Well, my family lived in a tent, a garage, and a basement during the Great Depression and I don't see people living like that now. Not being able to handle a high mortgage or rent payment is not really the same.

    June 16, 2011 at 2:08 pm |
  5. Dave, Orlando, FL

    It means that, thanks to deregulation of everything by the previous administration, Obama seems to be on a different planet as far as dealing with the multitude of serious problems this country faces. He’s done something I thought was impossible – make everything worse!

    June 16, 2011 at 2:13 pm |
  6. Larry Feierstein-Denver

    It means we are (as homeowners) upside down. Our homes have lost too much value to sell, cant keep up mortgage payments and potential buyers cant borrow from banks who wont lend money.
    Houses sit forclosed, vacant and losing value monthly. No signs of relief. Its another reason so many apartments are being built. Easier to rent right now.

    June 16, 2011 at 2:13 pm |
  7. Mark

    The Great Depression happened after another speculative bubble involving stocks which destroyed the middle-class investor. This Depression resulted from a similar bubble which is again destroying the middle and working classes. All of this is driven by central banks all over the globe and the Plutocrats who trade on all of the transactions.

    It means we're in for an extended period of Depression level un & underemployment like the early 30's...which didn't end until the resulting social chaos created WWII.

    It'd literally history repeating itself...and this is what we should fear.


    June 16, 2011 at 2:18 pm |
  8. John from Alabama

    Jack: The housing market is upside down, because banks and those who rate financial instruments were crooks. Moody and Goldman Sachs gave great reviews for bundled derivatives finanical instruments. The glowing reports moved mortgage companies and banks to give mortgages has part of this bundling of derivatives. Sort of like a dog who chases his tail. While this was going on, Moody and Goldman Sachs, bet against their on glowing reports. No wonder the housing crisis is so bad, but no one has been brought to justice for this huge financial mess.

    June 16, 2011 at 2:22 pm |
  9. james in north carolina

    It means that it can only get worse. We have only seen the tip of the iceberg in the housing crisis. Both the Republicans and Democrats are doing a lot of talking with little action. I fear the future is bleak. The next election will be about picking the lesser of two evils and then realizing the one we did pick was bad.

    June 16, 2011 at 2:35 pm |
  10. Tina Tx

    It should mean that whom ever is responsible for the melt down be behind bars but they will still be working on their next scheme on how to screw people but it is scary to know that we have gotten this far in such a short time and what is coming next? Everyone loosing their houses because of the corrupt top?

    June 16, 2011 at 2:37 pm |
  11. Bob Kobs

    Ask wallstreet and over-leveraging.

    June 16, 2011 at 2:37 pm |
  12. JENNA

    What does it mean that the housing crisis is now worse than the Great Depression?

    Oh come on Jack, really? Ok.

    It means that more Americans were in homes that they could not afford to begin with than during the great depression.

    Gee Jack.. It's not rocket science. Now who is responsible for the housing bubble.. ummm GW Bush... And all those "interest only loans" and loss of MILLIONS of US jobs he didn't work to get back from over seas.

    Roseville CA

    June 16, 2011 at 2:39 pm |
  13. Brad, Portland, OR

    It means that Alan Greenspan inflated the housing bubble for too long with all that cheap money.

    But he was trying to help Bush by propping up the economy when all of Bush's policies were busily weakening it.

    June 16, 2011 at 2:39 pm |
  14. david from herndon, va

    It means the annoying empty-nesters next door are NEVER going to sell their house and move.

    June 16, 2011 at 2:41 pm |
  15. Gary H. Boyd

    Back then home ownership was a genuine goal and lending institutions held the bar high for applicants. Few were approved that didn't qualify. More recently home ownership has become an investment tool for both lendors and lendees. Generous loan approvals to unqualified applicants put them under water when the housing market tanked. It means that the current situation was created by greed.

    Gary in Scottsdale, Arizona

    June 16, 2011 at 2:52 pm |
  16. Ted from Hershey, PA

    Jack, the housiing crisis is worse than the great depression because we have more houses than people can afford!! We have an excess inventory that was built up by un-sustainable policies that the congress pushed and legislated to banks and citizens thought they deserved a home when they did not invest in a down payment, lied about their income or did not even have a job, and did not meet requirements to borrow! Some were also caught by the recession, caused in part by the sub-prime crisis, but eventually the debt, deficit, and our spending like Greece and California is catching up with us!

    God (Allah) help us!!

    June 16, 2011 at 2:55 pm |
  17. JK (Minnesota)

    It's stinky Washington politics as usual – Not nearly enough has been done for Main street and in the case of the housing industry, the home owners with under water mortgages.

    Rather, Washington bailed out Wall Street and the Banks – those who contribute far more in campaign contributions. The american people basically only have their vote to give – last time I checked that was the most important thing needed.

    It appears it is far more important for Congress and the White House to that care of that top 1 or 2 percent of the populattion

    June 16, 2011 at 2:58 pm |
  18. Kevin SD CA

    What does it mean that the housing crisis is now worse than the Great Depression?

    It means that all the regulations and agency upon agency can’t protect an individual from his own stupidity!

    It means that the war on poverty and all the compensations you give people mean nothing if they have not earned their self-worth by honest labors (this goes for the feminists and the rest of the self-interest mob groups also)!

    It means that the liberals symbolized by the pig who built his house from straw, built a society out of straw rather than one of brick and mortar!

    It means that now we have this socialist government sticking us up so that the failures that created this fiasco can go on living like kings!

    It means that even though I owe nothing on my home and am completely solvent I get to carry a society of dead beats on my back until I die!

    June 16, 2011 at 3:00 pm |
  19. Paul From Austin Texas

    What it means is that in the end the banks want your property and everything you may have.

    June 16, 2011 at 3:00 pm |
  20. Rich McKinney, Texas

    Jack in all honesty there is no comparison to the great depression housing crisis and the crisis today. First off most homes or roughly 70 percent had absolutely no mortgages on them compared to 40 percent today. A lot of homes were family owned farm houses. There was no such thing as a 30 year fixed rate mortgage because it did not exist. Homes were bought in 3 to 5 year increments. At the end of that 3 to 5 year period you either resigned with the bank or you sold the land and paid off the note. The difference now is that fewer people own homes outright and therefore when the economy crumbles people lose everything they have because it is borrowed and financed. Just like our foreign debt. Without jobs we have absolutely no way to pay that debt back and that makes America a very bad financial risk.

    June 16, 2011 at 3:00 pm |
  21. Comment

    During the last big depression the (( American people did not have )) the Internet or cell phones or mass transportation and interstate highways.
    The majority of The American people were pretty much in the dark to what really happened, when the last depression hit.
    Today (( American people have )) the Internet we have satellite TV and we have cell phones instant communication, the American people have the ability to travel very quickly to any place in United States.
    The American people are well informed, and know who to point the finger at, and go there very quickly, are you catching my drift.

    People in Washington DC and New York New York Wall Street Banks, if there is a big depression food shortage and shortage of everything, they better find a cave and bury themselves in it, and hope the American people do not get their hands on them.

    June 16, 2011 at 3:04 pm |
  22. Burt in Az

    It means we are in Great Depression 2. During the Great Depression many regulation laws were passed to prevent it from happening again. Then in Gingrich era they decided to deregulate and the door was open for it to happen again, which it did. It is now worse because the U.S. population has more than tripled since then so the numbers will be greater. So much for deregulation.

    June 16, 2011 at 3:14 pm |
  23. Michael Bindner, Alexandria, VA

    It means that maybe Obama will do what it takes to stop it, selling Freddie and Fannie to the Federal Reserve so that they can direct mortgage servicers to start writing down morgage loans to market value. If he does that, he gets an Economics Nobel to go with the Peace Prize.

    June 16, 2011 at 3:18 pm |
  24. Terry in Virginia

    It means that no one in The White House or the Congress has a clue how to fix the problem. It's reprehensible that Wall Street and big business still get subsidies while middle-class and poor families get told to hit the street, go fend for themselves, and live under a bridge because no one in government gives a damn about us any more. Want to fix the housing crisis? Vote and throw out all the incumbents, particularly those who take money from Wall Street and the Big Banks who created this crisis. Rhetoric won't solve this problem; action will - something our elected representatives don't really care about because they're so blinded by greed and ideology that they choose not to see, much less act on behalf of Main Street.

    June 16, 2011 at 3:22 pm |
  25. Bizz, Quarryville Pennsylvania

    It means that the people who can change the housing crisis don't care because they are doing just fine. Back in the great depression mostly everyone suffered with rich and powerful people jumping out of tall buildings. But today the wealthy was lifted back up on their feet and are making money again. Meanwhile people who were suckered into buying these homes are now left holding the bag. This is why we're quickly becoming a two class nation. When that happens the people setting in the driver's seat will be forced to act.

    June 16, 2011 at 3:25 pm |
  26. Eve of Texas

    It means that the republicans, with the help of Fox news, are very successful in sucking all the money from the economy and giving it to the rich and powerful, so that they are guaranteed to be reelected. It means that the religious right and their churches are just like the politicians they elect in this complicity to rape the middle class and working poor. I wonder what Jesus would think of that, to quote many of the "religious" right. Eve of Texas

    June 16, 2011 at 3:29 pm |
  27. Kevo in New Mexico

    It means we have the wrong people in office, plain and simple.

    June 16, 2011 at 3:30 pm |

    tampa, fl that maybe both parties ideas on free trade, corporate welfare, not taxing the rich, allowing extremely too much immigration (legal & illegal) and encouraging every good paying job to leave the country isn't the answer? Unions can't organize when there are no jobs, the EPA hasn't a job when there are no manufacturing jobs to pollute, and no way in hell can an american job compete with slave wages of 3rd world countries. an economy build on spending is just another pyramid scheme.

    June 16, 2011 at 3:31 pm |
  29. Steve, Clifton, VA

    During the great Depression there were far fewer people living in housing that they couldn't afford or living beyond their means. And I bet you could count the number of credit cards issued on one hand. Today's situation was created by the Banka, Mortgage companies and people who wanted to live the big life before they earned it....

    June 16, 2011 at 3:31 pm |
  30. Russ in PA

    It means that the government should have listened to Ron Paul in the first place: until you allow the bad debt to be liquidated and housing prices to fall, you won't clear out the inventory, and you won't solve the problem. Trying to prop up prices and debt with bail outs and government spending does nothing to solve the problem, and ensures that the next correction will be even larger. But, of course, the President and Congress want us to continue kicking cans down the road until we've got lots of cans to kick, but no more road. By then the cans that should be kicked hope to be out of office and retired...

    June 16, 2011 at 3:33 pm |
  31. Mark in Oklahoma City

    It means that builders no longet build "affordable" homes. Every young couple wants a fabulous three thousand square foot home with a pool and a three car garage. In other words, something they can't afford. The greatest generation knew how to start out with a "starter" home and buy bigger when they could afford it. Now, our spoiled, younger generation X, Y, Z or whatever you call them want to start at the TOP, and that ain't how it works. It's our culture, Jack.

    June 16, 2011 at 3:37 pm |
  32. Ray in Knoxville

    Jack, our economy in the first half of the 20th century was more diverse. The truth about the economy of the 2000's is that it was based on two sectors, housing and defense spending. The housing bubble was severely over-inflated because the government (and it's wealthy cronies) had nothing else to offer us. Now that the bubble has burst, the neither the government or the wealthy have anything to offer as a replacement.

    June 16, 2011 at 3:37 pm |
  33. Larry from Georgetown, Tx

    It means that all of the world renowned economists that said outsourching jobs it good for our economy were wrong and that the Bush tax cuts and trickle down economics doesn't work. Were in real trouble and no one is taking the action to get us back to where we can be. Jobs, good jobs.

    June 16, 2011 at 3:40 pm |
  34. Gerry

    It means we have stimulated this great country into poverty. What else did you expect from an administration of rabble rousers? Most of the advisory positions in this government have never held a job in the private sector. If you have a plumbing problem you hire a plumber, an auto problem you go to a mechanic. This administration went to the folks that have great theories but no track records or experience.

    Ash Fork, Az.

    June 16, 2011 at 3:45 pm |
  35. Dennis north carolina

    the housing crisis was there long before the economy crisis. prices of houses spun out of control after deregulation of housing loans open the market to ever one causing a demand larger than supply there fore inflating prices over the actual cost. republicans can take the blame for this plus some democrats in sheep's clothing.

    June 16, 2011 at 4:01 pm |
  36. Alex in Bremerton, WA

    Too many people got mortgages they couldn't afford on overinflated housing prices during the bubble and then they lost their jobs during the Bush Recession.

    June 16, 2011 at 4:06 pm |
  37. Bill in PA


    It means that:
    What does it mean that the housing crisis is now worse than the Great Depression?
    1. 24 million Americans looking for full time jobs.
    2. Middle class loss of real wages for the past ten years despite high costs of necessities: milk, bread, medical care, rent, utilities, education etc.
    3. Little or no savings to fall back on.
    4. Real assets already mortgaged.
    5. Radicalization of our social discourse.
    6. A nation built on military actions around the world.
    7. Elected officials with no sense of building America with just, rational, truth based policies.
    8. Our corporations only care about short term profits, cost cutting and moving around the world to cut all their costs.

    It is not sustainable. Some event will bring on great change. Democracies do not have long tenure as national forms of governance. The rich just do not like to share. They are addicted to power and control.

    June 16, 2011 at 4:12 pm |
  38. Nate NC

    Either the Great Depression wasn't all that bad or we Americans do not want to learn from history. The fact that people do not have what they NEED in life shows that we are a nation that too often lives beyond our means. Or, with an out of control, unpredictable, unreliable government, it may mean that we are drawing closer to a new American Revolution.

    June 16, 2011 at 4:13 pm |
  39. Don Desaulniers (Belleville, Ontario)

    It really was caused by a lack of oversight by both your federal and state governments. Canada totally avoided the housing collapse. How?
    1. Most high-ratio mortgages were insured by our federal government. That meant individual banks couldn't collapse no matter how many borrowers defaulted.
    2. No mortgage deductibility for one's home. Therefore, no incentive to borrow heavily on it. In Canada paying off one's mortgage is a goal. In America, using one's home as an ATM was prevalent.
    3. Greed and deception barely exists in Canada. Therefore, no liar loans, no balloon payments, and no conning of ordinary borrowers into too much house.

    June 16, 2011 at 4:20 pm |
  40. Pete in Georgia

    Can you say "House of Cards" ???
    Our obsession of everyone owning a house..................at any cost.................is what lead us into the current disaster.
    Unscroupulous, dishonest, immoral lending, backed by the same kind of federal congress led America off the cliff while padding the pockets of bankers, brokers, and politicians.

    Sad and pathetic.

    June 16, 2011 at 4:23 pm |
  41. Ken from Pinon Hills. California

    It means when we start comparing events to the depression, we, "most of us", are probably going into a depression. When the stock market crashes it means a depression for all of us.

    June 16, 2011 at 4:24 pm |
  42. Sandstone.

    "So now you have more real estate to work with! But you had better use your contracters to do some repairs instead building more. Clear out some of the asbestose, and the other old poisonous materials first, make buildings safer just incase you do get more Sunami's. Do more location work and clear out unused districts for the future!"

    June 16, 2011 at 4:27 pm |
  43. David in Tampa

    I don't know what it means. I just want a list of soup kitchens in my area!!

    June 16, 2011 at 4:27 pm |
  44. Ralph Nelson

    We built an artifical economy based on housing. Everybody's house was a piggy bank you bought, prices went up and you sold, the economy was driven by the spending from the gain. They deregulated the banks (Senator Phil Gram), the banks gobbled each other up acquiring massive debt, made $13 in loans for every $1 in reserves to cover bad loans. The economy faultered and the economy collapsed. What does it mean? Government's proper place is to be a referee between big business and the consumer, like in a prize fight. Remove the government by exessive deregulation and in come the crooks with their no money down home loans, etc. When they deregulated and did variable rate mortgages (like a stock margin call in 1929) it was predictable . This didn't just happened...it was created by bad presidential/Congressional management..

    June 16, 2011 at 4:28 pm |
  45. Sylvia from San Diego, CA

    It means that it is time for this government to stop bailing out people who can not afford to be bailed out. It is time for the banks to work with those of us who puchased homes with real income and down payments and renegotiate our loans including principle....

    June 16, 2011 at 4:29 pm |
  46. Bill in New Mexico

    Our government does not yet have a handle on solving this recession.

    The stimulus package did more harm than good–plus adding to the debt.

    Ron Paul is correct. The housing bubble should have been allowed to burst.

    We are on the slippery slope of something worse.

    Allow me to add what is really frightening:

    The real and only solutions are significant budget cuts and tax increases.

    No politician (Democrat or Republican) has got the guts to do these, because he or she would not get re-elected.

    But long (at least a couple of years) before the positive results could be realized, these necessary cures will significantly worsen the already bad recession.

    Therefore these cures are double political suicides.

    Our politicians have gotten us into quite a pickle!

    Our politicians have managed to wound the Achilles heel of our Democracy.

    June 16, 2011 at 4:31 pm |
  47. Fred In LA

    It means this President and his fellow Democrats have failed! The Federal Government can't spend its way to prosperity. I'd like to trade all these clunkers in.

    June 16, 2011 at 4:31 pm |
  48. andyz Lynn, MA

    If you are among the richest in the country and a contributor to the republican party it means nothing at all. if however, you are a vassal like the great majority of us are; don't worry about another great depression. Worry about serfdom. (And for those in California this does not mean the waves are rolling in!)

    June 16, 2011 at 4:31 pm |
  49. Karl in Flint

    Perhaps this time around we had a far more imaginative pack of thieves on Wall Street writing loans that were doomed but when dressed up pretty were salable to someone else before the manure hit the ventilator system. It means the Bush deregulation of banks and most other financial institutions along with his TARP bailout made the rich richer and the poor homeless. No one was twisting the bankers arm to make these loans. They saw an opportunity to swindle the public and very aggressively did it and, sad to say, got away with it.

    June 16, 2011 at 4:31 pm |
  50. HJ - Saint Paul, MN

    It means there are actually consequences to our actions. It means logic has won over rhetoric, yet again. The time to act has passed us by. Its not some date in the future, and we can somehow wish it away. Yes, we are actually in trouble now.

    June 16, 2011 at 4:34 pm |
  51. Lori - PA


    That businesses should not have been allowed to outsource jobs. That banks should not have given loans to people they knew couldn't afford the house they wanted to buy. But it's a little to late for that, and I'm not counting on our government to come up with a solution. They're to busy bickering, and playing the blame game. No one person, or administration, is responsible for this, and the sooner politicians realize that, the sooner they can figure out where it all went wrong and fix the damage that has been done.

    June 16, 2011 at 4:35 pm |
  52. David of Alexandria VA

    It means that a lot more people were borrowing up to the hilt on their equity in 2007 than in 1929. And that more people were living within their means without credit cards in 1929 than in 2007. So, when the respective Big Ones hit, people had planned for more resiliance to disaster "back in the day."

    June 16, 2011 at 4:44 pm |
  53. Terry in Chandler, AZ

    Your answer to the question was in the question Jack ,in the third paragraph. But it was greed, greed throughout the mortgage industry and homebuilding industry. Also unsophistigated buyers had a lot to do with it. I know of 21 year old newly weds who purchased expensive homes. Add to that investors who flipped homes as quickly as possible. I saw tract homes here in the Phoenix market increase in price 2 or 3 times per week. That comes from greedy builders. Short answer: greed and stupidity at many levels.

    June 16, 2011 at 4:45 pm |
  54. Annie, Atlanta

    It means there aren't enough elected representatives in Congress or the White House, who aren't wholly owned by Wall Street and the Corporations, to fight on behalf of most of us. It's pretty obvious when the plan is to take more from those who will literally starve to death, so the rich can have bigger tax breaks and subsidies, while trying to convince us that it's the best plan ever, don't you think? And the ignorant masses just eat it up. We're in trouble.

    June 16, 2011 at 4:50 pm |
  55. thom richer

    It means the unemployment numbers the government has been concocting over the years is finally being proven flawed, inaccurate and deceptive and likely half of the actual number. It shows there is no such thing as "job creation" as this and past administrations have claimed and continue to claim. It means our tax money is not being spent wisely or for the benefit of Americans and is going to the wealthy and corporate interests. It means the American public is without government representation. Banks, lending corporations, Wall Street, Congress, credit card companies continue their corrupt business practices intentionally designed to specifically fleece American workers. It means Congress has failed us.

    Thom Richer
    Negaunee, MI

    June 16, 2011 at 4:50 pm |
  56. Rob in NC

    It means our government has done nothing to help the American people. They are busy bailing out every corporation in the free world but no help for the little guys. If the money they spent, just on the TARP, had been divided equally, every man, woman, child, infant in this country would have received a check for about $2500 – that's 10 grand for a family of 4. Guess who gets to foot the bill though? Rob in NC

    June 16, 2011 at 4:53 pm |
  57. Tony Roberts


    In the Great Depression, all countries were in the dumpster. In this one, some countries are doing very well. So what's the moral with respect to the real estate story? The US had better ensure that it has some means of preventing its now cheap real estate from being snapped up by wealthy foreigners–otherwise your children won't have a country to call their own anymore.

    Vancouver, Canada

    June 16, 2011 at 4:56 pm |
  58. Rick McDaniel

    It means we ARE in a depression, and NOT a recession, which is what I said at the beginning.

    Basically, everything the government is feeding the media, about the economy, is nothing short of a lie.

    June 16, 2011 at 4:56 pm |
  59. Joe CE

    The present housing crisis was triggered by irresponsible sub-prime loans. This was very rapid and has been largely recovered. thru government intervension, The current crisis was also caused by the decline in the earnings of middle & low income people, which has not been corrected. The long term out look is poor. The stock market has recovered on the overseas profits not bexause the US economy is doing well.

    June 16, 2011 at 5:00 pm |
  60. Ed from MD

    Nothing, it doesnt have the ring to it that great depression had. Great depression sounds like a time of blackness and darkness but housing crisis sounds like a time for camping.

    June 16, 2011 at 5:00 pm |
  61. Kevin in CA

    It means that the neocon oracles have been successful in promulgating government by the banks, of the banks and for the banks.

    June 16, 2011 at 5:10 pm |
  62. Mary Steele Yorktown VA

    It means that our government big shots are a failure! Geithner, Bernanke and the likes failed to recognize and/or stop further devastation, and then our Democratic controlled Congress was so stupid and/or corrupt, they turned around and gave the very people that failed us, trillions of dollars, with absolutely no oversight, to fix it!! Banks and "select" others were given bailouts for their poor business decisions such as loans on homes that was not appraised, and to people who really couldn't afford them to begin with.

    Congress should issue a moratorium to stop the free-fall and make banks deal with their decisions and work out a plan with homeowners to make the payments affordable to their current income, even if the loan is 40 years or more!. At least they will be paying on a routine basis and stop the nosedives that effects everybody else!!

    Yorktown VA

    June 16, 2011 at 5:11 pm |
  63. Michelle

    The reason the housing crisis is worse now than ever before is because wages aren't going up and prices are. People were given a false sense of security and they went into more debt than ever before. People need to realize that nothing in this world is certain and need to stop over spending. Start sacrificing and stop looking at ourselves and look out for our neighbors. Stop thinking that the world is theirs for the taking. Never in my life have I seen so many people so self absorbed than I see now. It saddens me beyond words to see what we as a Great Nation are becoming. Big Business needs to start paying their workers, the heart of their business better wages and giving back benefits. I know the CEO's and Upper management have benefits and cushy homes and don't worry from day to day how they are going to pay their mortgages. The "working class" needs to be given what they are worth so they can afford to pay for a home instead of being shoved into a corner with no hope.

    June 16, 2011 at 5:22 pm |
  64. Deborah Seibert,. Co

    Housing was doing fine until the government insisted that loans be made to people who could not afford them. The liberals decided that, no matter what, everyone could own a home. They were wrong but forced banks to revamp loan requirements and loan to people who in no way could afford them.. Now they are blaming the banks. Housing will recover but loan should be made on merit alone. I have no problem with preferential treatment for vets but again, they should be able to pay.

    June 16, 2011 at 5:24 pm |
  65. Gigi Oregon

    We are down and discouraged because the very people (party) that caused all these problems want to buy their way into power to fix it. But to use a phrase from the 30's "believe-you-me" they're out to finish us off. When they get through with you you'll owe your soul to corporate America.

    June 16, 2011 at 5:30 pm |
  66. jimmiek in Texas

    Well gosh Jack... It means the BIG FAT CAT OVER BONUSED (IT is their GOD GIVEN RIGHT) banks haven't put all the bad news on the table yet... They are strategically dribbling it out so they can recover as much of the HIPE FAKE CRIMINALLY gotten wealth into REAL DOLLARS paid by you, I, and every American Tax Payer...

    This is the RIP OFF of the Milenia Jack... It is the largest transfer of wealth from the poor and the middle class to the rich in the world's history... Even more than the great robber barrons of any era...

    Its hard to plan a recovery when the people who caused it are hiding the facts.. Can anyone say SHADOW MARKET....?

    Everyone of these robber white collar criminal bankers (and investment houses) should go to jail, go directly to jail, do not pass go, and do not collect the 200 million dollars... (each)...

    It is like the Song... I WANT IT ALL!

    June 16, 2011 at 5:31 pm |
  67. Laura

    Just think how much WORSE the using crisis will be when Obamacare kicks in, and EVERY taxpayer owes a 3.8% tax on the sale of a home (if they still have one). Bad at math? That's $15,200 - in addition to the extra 5% in higher capital gains taxes (another $20,000).

    So what will smart investors do to avoid losing $35,200? DUMP and SELL, of course. Obama's 2011 housing slump will look tame compared to the depression of 2012 ...

    Read the bill, folks! Do the math! Obamacare is going to ruin housing after it finishes ruining the job market ...

    June 16, 2011 at 5:33 pm |
  68. cal

    well who's to blame. dem. rep. people banks.

    when our people in washington d c stop playing poticks and work for the good of american we may get out of this. FAT CHANCE

    June 16, 2011 at 5:39 pm |
  69. dave in nashville

    Simple, it means we have more landlords than ever, and most are banks. Not a good recipe for recovery.

    June 16, 2011 at 5:41 pm |
  70. Donald in New Mexico

    It means the rich can use their tax cut to buy houses at bargain rates.

    June 16, 2011 at 5:45 pm |
  71. Loren

    You can't really compare the two. During the Great Depression, millions were left homeless and began the great migration to California and the northern cities from the South. There has been no similar dispossession or migration.

    What this did do, though, that is similar is to wipe out billions in dollars in wealth from the American middle class and left it with bleak prospects in the face of an inept government. Will President Obama be remembered as presiding over a depression in the same way as President Hoover?

    June 16, 2011 at 5:48 pm |
  72. MaryBeth

    Jack, it means that the economic situation is very, very bad. It also means that housing costs were vastly over-inflated during the boom years, and now the market is starting to correct itself. Prices started rising rapidly in the 1980's without a corresponding rise in wages. That made it harder for the average person to pay off his mortgage in a shorter period time.

    The other problem is that there is still no regulation, no oversight except for what the banks do themselves. The system worked well for a long time, then Republicans (and some Democrats–there are no innocent parties here) decided to listen to the corporate and financial lobbyists and deregulated the whole thing. An honest corporation doesn't have to worry about regulations because it is already doing the right thing. Deregulation opened the floodgates for the greed, for the dishonest, and for the return of the robber barons of the late 19th century. I have an idea–let's go back to the regulations FDR enacted. Yes, corporate America will howl with indignation at the very thought of even a single regulation that might prevent them from abusing the system. The plutocrats and the lobbyists will work hard to ensure that an appointees as regulators are weak or don't believe in the regulations they are supposed to enforce. But wouldn't it be great to have those protections again? And who knows, maybe, just maybe, the economy will turn around.

    June 16, 2011 at 5:55 pm |
  73. Claudia, Houston, Tx

    People use to say to their employer "take this job and shove it" now they're telling the banks/mortgage companies to "take this house and shove it".

    June 16, 2011 at 5:58 pm |
  74. Renee Peoria,Ill

    It means those responsible were not held accountable. Those who fail to learn from history are doomed to repeat it. We have learned nothing and Wall Street has doomed us.

    June 16, 2011 at 6:03 pm |
  75. Dee in New Paris Ohio

    Jack, PLEASE stop with the idea that so many people overbought in the housing market, and that it is their fault they are losing everything.

    While there are those who did overbuy, there are MANY, MANY people who are losing or have lost their homes who did NOT even buy those homes in the "bubble" leading up to the present economic situation.

    PLEASE, take a look at some of the foreclosures listed in local papers, and although I only know about the places I have lived (FL, GA, OH) I feel the same thing has happened all across this country. People who owned their homes for MANY YEARS are also losing their homes.

    And it is because the same people who helf their jobs for many years have been dumped by corporate America! No jobs? No money to pay the mortgage, even if it is a modest one that has been paid on for years.

    And to the LENDERS this is like pot of gold! First, they have been reaping usurious interest from the borrowers. Then, they foreclose and take the losses they sustain as deductions on their corporate taxes. Then, they can re-sell the properties and start the whole procedure over again!

    But the main reason the current situation is worse than during the Great Depression is that there is not the same extended family system there for those who are in deep trouble. In the early 30sfamilies would come together and pool what resources they gad to make it through. that is way more difficult today, when some families are scattered all across the country and the safety net is just not there.

    June 16, 2011 at 6:06 pm |
  76. Tom Bulger, Canandaigua

    Bankers were more moral in the first depression. They had personal pride and a respectable image they maintained.

    Today's Wall Street thought that Graham and Bush would let it get away with anything, and they did. Regulations and safe guards have been stripped away to make theft legal. Not a single soul has been prosecuted. Selling all those bad mortgages as safe investments to our pension funds was nothing anyone will ever do time for.

    Nothing has changed. If Obama doesn't appoint Elizabeth Warren as director of the Consumer Financial Protection Bureau, nothing will change and we sheep will be shorn again.

    June 16, 2011 at 6:12 pm |
  77. Roger from Phoenix

    Jack Jack Jack , this housing market has a long way down still.
    Creative financing for the pass 30 years got us in this mess and it will take 20 or 30 years to get out . Prices will continue to fall until the average household income is in line with the average medium price of a home. Anyone who bought a home priced more then 2 1/2 times their income was stuiped . Average yearly income 50 thousand max price of home 125 thousand , sounds like the medium price still has a way to go ,

    June 16, 2011 at 6:13 pm |
  78. Rena

    Jack – absolutely nothing. Zero. The reason why home prices have "fallen" so dramatically is because pre-recession values in the Bush banking de-regulatory era weren't real to begin with. Home values today are what they should have been before Republicans decided that the "free market" cures all ills. Yeah right.

    June 16, 2011 at 6:21 pm |
  79. Russ From Dayton NV

    As a practicing Realtor in one of the worst countys in the entire US (Lyon County, Nevada), I can tell you that the end is not even close. Expect a minimum of 3 years and probably 5 years before this mess is cleared. Unfortunately, I have a solution that will end this crisis in one year, but no one is listening. If you want my solution, which has appeared in 10 publications, simply google "A solution to the real estate crisis" .

    June 16, 2011 at 6:22 pm |
  80. GringoLoco - Costa Rica

    Oh this is sad news. Maybe we can borrow a few trillion more from China and bail out the stupid and the greedy?

    Hope and change YOU can believe in, right?

    June 16, 2011 at 6:22 pm |
  81. Brian, Pensacola FL

    Jack, it means that it's a great time to buy a house. But, then again, if the government can't pay it's bills in a month and a half I may want to wait before I commit to increasing mine. Sounds a little too common sensical for the world we live in today. For that matter, if those in Congress or the White House have any common sense they ought to greatly increase unemployment benifits. That way, if they can't agree to raise the dept ceiling they'll have something to fall back on when they're terms run out.

    June 16, 2011 at 6:24 pm |
  82. Jim in Panama

    The housing crash and record low mortgage rates provide young people an historically unprecedented opportunity to buy that first house .... if young people had jobs, that is.

    June 16, 2011 at 6:25 pm |
  83. alan scouten

    It means the housing industry housing only for customers who could pay top dollar, and the conspired with the banks to loan to anyone, whether able to afford or not. No affordable housing has been built for forty years.
    "Why should I build six small houses, when I can make more money building just one big one?" (NE Builder/88) Now the market is flooded with product no one can afford. Prices slide the longer they sit. There is a market for affordable housing, but there is no industry to produce it. Just ask the unemployed construction worker.

    June 16, 2011 at 6:26 pm |
  84. Michael

    What it means is our monetary policies are deeply flawed. Prior to the Great Depression any downturn in the economy was left for the free market to sort out. Meaning any excess in the economy was liquidated and we went back to work. Sadly, since then we have succumb to the Keynesian theory of central economic planning. It's not a coincident that when the government and FEDERAL RESERVE want to "help" things get much worse, such as, when congress and President Bush wanted to have everyone buy a house. As long as this continues we will NEVER have a recovery.

    June 16, 2011 at 6:27 pm |
  85. Arabrevolution

    Its simple, did it ever occur to you that this is just the beginning of the end?

    June 16, 2011 at 6:27 pm |
  86. ed

    Its the monthly payment that counts. 40 year terms and 2% rates can help everybody beat the affordability issue. Under these numbers, homeowners save $300 for every $100,000 refinanced. flip those new mortgages into retirement bonds for same homeowners and everybody wins.

    June 16, 2011 at 6:28 pm |
  87. Stephen Charchuk

    Those who don't learn from the past are doomed to repeat it. That is why this crisis didn't affect us up here in Canada all that seriously. Our hosing and banking industry are regulated. You only have your short-sight selves to blame. Fool me once shame on you, fool me twice shame on me.

    Yarmouth, NS Canada

    June 16, 2011 at 6:28 pm |
  88. Odhiambo Ocholla

    This housing crisis was caused by greedy Wall Street "Nincompoops". To me i think its a blessing in disguise because i live in San Diego,CA and never really liked the idea of people all over the World buying houses in San Diego, CA and later sell them for a quick profit. If you want to buy a house, then buy and live in it rather than buying and flipping it for a quick profit. End result, is that most of the folks who bought houses for profit are now either foreclosed or in the red with some ballooned mortgages and that serves them right.

    Finally, houses in San Diego, CA are cheap and prices are continuing to fall. My advice is that buy a house and live in it. It took 19 years for the housing industry to recover after the Great Depression and it will take longer to recover after this recession. Not forgetting that i am a Civil Engineer who was laid off due to the housing industry collapse and had to retrain just to get a job in this crazy economy.

    June 16, 2011 at 6:28 pm |
  89. Brian in IL

    It means that we are closer to Great Depression II than we have been led to believe. When few can find work, nobody can sell, and many can't buy because of lack of money and work, it is very hard to believe the rosy statistics which are put out there by all the pundits in the media.

    June 16, 2011 at 6:31 pm |
  90. steve - virginia beach

    It means that it's way past time to repeal the Clinton-era deregulation and lending regulation modifications that force lenders to lend to those who aren't credit worthy. In other words, resume common sense in our credit markets. Separating investment and traditional banking would be wise also if that isn't asking too much from our elected elitists.

    June 16, 2011 at 6:31 pm |
  91. sally

    It is irresponsible to make a statement like that without adding that housing prices were ridiculously inflated before prices started to fall. It's probably nowhere near depression era percentages if all the facts were weighed.

    June 16, 2011 at 6:32 pm |
  92. Ken in NC

    "He who fails to learn from his mistakes is doomed to repeat them." The lack of regulations and greed in the past lead to the Great Depression. Regulations were put in place but deregulation and greed took place again because the lessons were not learned so now we find ourselves repeating these same mistakes again.

    June 16, 2011 at 6:32 pm |
  93. alan scouten

    It means the housing industry housing built only for customers who could pay top dollar, and then conspired with the banks to loan to anyone, whether able to afford or not. No affordable housing has been built for forty years.
    "Why should I build six small houses, when I can make more money building just one big one?" (NE Builder/88) Now the market is flooded with product no one can afford. Prices slide the longer they sit. There is a market for affordable housing, but there is no industry to produce it. Just ask the unemployed construction worker. This is not an accidental depression. It is deliberate.

    June 16, 2011 at 6:32 pm |
  94. Connie A

    People were not paying attention to the Asian market collapse back in the 90s. Everyone said "The US is okay, not going to be affected!" The market was going great guns, no matter that the market was over inflated! This country needs to start electing "LEADERS" instead of voting for "THE PARTY." Stop electing anyone with a law degree and look for successful business men with business and economic degrees or know how to run a business and make a profit.

    June 16, 2011 at 6:33 pm |
  95. Ros - Illinois

    Come on Jack, don't include yourself in the ones that can't afford a house. Give me a break. A lot of these people have children at home and have no home and a lot of people simply bought beyond their means. Maybe they just wanted to keep up with the Jone's as the old saying goes. No I don't think you are in the same predictiment.

    June 16, 2011 at 6:34 pm |
  96. richard a. winkler

    It means that the United States of America is headed for the toilet bowl.

    June 16, 2011 at 6:35 pm |
  97. Greg - New York, NY


    Like all manias dating back to the 1600s ( including the Tulip craze ), housing still has a ways to go down – everywhere. Now that wages stagnate, unemployment is rampant and jobs and income tough to come by, prices are reverting back to their mean price. During the past twenty years, we lived during a period where mortgage loans were to easy to get, appraisals inflated, no money down became the norm and incomes were not checked religiously. It was easy to make a bad investment in an overpriced home, and easy for a bank to make bad loan since they sold it into ther securitization process anyways. Your house or apartment is only worth what someone is willing to pay ( assuming they are approved for the loan or have the resources ). The last three people to try to buy my place ( for about half of what I paid ) were all turned down by the bank. So, let's just say that prices are normalizing as "True underwriting" standards begin to return. Mean reversion Jack – the housing craze was just another bubble we all fell for yet again. And thanks Wall Street. It was their mortgage pumping machine with the likes of Fannie, Freddie and all the banks and corrupt appraisers that created this scam in the first place in an effort to create bonds for gullible investors. The home owners and investors in these bonds all lost while the Banks and Investment Banks reaped huge fees in the process. Now we have people that overpaid for homes they can't sell, that are worth half to one third of what they paid and Countries and Pensions that bought bonds backed by overinflated properties that are worth 35 cents on the dollar. Nice job. Housing crisis worse than the great depression ? – yes for consumers, but no for Wall Street.

    June 16, 2011 at 6:36 pm |
  98. barbara in nc

    It's already happening. Cities in trouble are selling themselves to foreign nationals, just to pay the deficit THIS YEAR. Next year, they'll be selling entire states (Wisconsin will be first, followed by Michigan - look what's happening there already).

    June 16, 2011 at 6:37 pm |
  99. lynnej in nc

    It means that the banks got away with their crooked frat boy poker game and is poised to do it again if the Republicans have their way.

    You think this is something now, let these mental cases get full control of the House, Senate and the Presidency.

    These people will make the Great Depression look like a walk in the park.

    June 16, 2011 at 6:37 pm |
  100. Dean

    It means that the economy suffered a mortal wound in 2008. The best way to help the economy recover from the housing crisis is to create Lots and Lots of Jobs.
    The only chance the economy had of recovering was if we passed the Clean Energy Jobs Bill. It would've put millions to work building solar and wind power plants and the infrastructure to connect them together across the nation. Democrats had a majority of 53 senators ready to vote Yes . Then Republicans Blocked the Vote with one of their 373 filibusters - Tripling Their Previous Record. Filibusters were THE Most Important News Story of the Past 2 years. It was the first time in U.S. History that a Senate Minority Chose to BLOCK almost Every Single Bill the Majority tried to pass.

    When Americans voted Republicans back in control of Congress last fall, that Ended any possibility of an economic recovery. The Private Sector bought last year's election and now they know their money can buy the next one too - so why should the private sector bother to create jobs?

    June 16, 2011 at 6:40 pm |
  101. Jim

    In 1980 I purchased a house for $70,000, in 2000 I sold it for $100,000. In 2006 the house was appraised at $180.000 nad today $125,000. Sounds more like an adjustment to an over valued market than a decline in value if you ask me.

    June 16, 2011 at 6:41 pm |
  102. bruce

    It is a permanent trend that is caused by having money which can be inflated via printing massive amounts, and charging interest on loans(should be highly illegal). The central banks(Rothschids) collect the inflation tax, and their minions the Federal Reserve acts as inflation-tax collector.

    June 16, 2011 at 6:43 pm |
  103. Christy Sandhoff

    Why it was so easy a Caveman could figure it out. Dems in Ca. send Guv Brown a bogus budget just so they could get paid as per the proposition (25?) that was voted in. Had they not submitted this piece of trash, they would have been cut off from receiving a paycheck! Brown vetoes it ASAP, legislature gets paid, and Ca has no budget AGAIN! I swear you just cannot make this stuff up! courtesy of Paul Smith

    June 16, 2011 at 6:47 pm |
  104. Allen Long Island, NY

    This means that all of those bad interest only and 80/20 mortgages that caused so many to go into default are going to hit a stale housing market. This means that all of those bad derivitives and hedged bets are going to crash with such thunder that we have not yet seen the bottom.This means that all of the deregulation that the government allowed, with the hopes that they would police themselves, didn't work.

    What is the correction? Actually use whats left of that tarp money to bail out the American people and not the fortune 500's that actually got rich off of this scam. The myth of "too big to fail" needs to be recalculated. Stop giving a pass to all of these unscrupulous exec's that rape, rob and pillage to get wealthy of the backs of hard working Americans. How about starting to prosecute some of these people?

    I have another idea? How about controlling the cost of fuel, so that we can actually start saving up a few penny's rather than allowing big business to take every last cent from our pockets...

    Viva Revolution!!!

    June 16, 2011 at 6:48 pm |
  105. Jack - Lancaster, Ohio

    Mr. Cafferty:

    Russ above had great ideas in his real estate solution, I can see that the banks tank loans personally and not in a business reality sense. They are shooting themselves in the foot for poor business acumen.

    June 16, 2011 at 6:54 pm |
  106. barbara in nc

    If you think it's bad now, wat until the republicans cut off social security and you see all the old people living under the bridge – with no food, no medical care, and no one that cares.

    June 16, 2011 at 6:55 pm |