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b will "stop" (not really sure what that means) when they get their balance sheets clear, and c is slated to stop this winter (if it hasn't already).
(and when C stops, get ready for inflation).
The government is trying to deflate the bubble slowly to avoid an even bigger foreclosure crisis. A rapid property value decline would be awesome for those of us who want to buy a house, but it would wreak havoc on local governments and individual finances. Through some combination of inflation and slow devaluation most people will keep their houses. Sucks for the 35% or so of us who don't own, but that's the nature of a democracy.
article : No Easy Exit for Government as Housing Market's Savior
http://online.wsj.com/article/SB125297162259710323.html
It looks like the US Gov is doing the following things to pop housing market:
a. FHA loan Garantee
"The Denver home lender sees every day how dependent the housing market has become on the government.
At the height of the boom, just 20% of Universal's mortgages were backed by the Federal Housing Administration,
an arm of the government that guarantees loans to borrowers who can't afford big down payments.
Today, the FHA accounts for more than 80% of his business.
For Mr. Lansing, this represents a new way of life -- more government, more paperwork,
but also a lot of sales that wouldn't have happened otherwise."
b. Bailout Fannie Mae and Freddie Mac
c. Fed purchases of morgage backed securities - $1.5 Trillion;
d. $8,000 first time buyer tax credits
I wonder if anyone have the information to predict when the b and c will stop and why....
Thanks.
#housing