Are the home prices falling because the Dollar is so devalued (.62) ...??

Question

If so...what to do?

Answer 1

Too many on the market defaulting, not selling. One of about fifty good reasons never to trust the neocons and by default, Republican deregulation in general.

Answer 2

No. They are falling because banks and loan companies could get away with providing incredibly bad loans (ARMS, interest only loans etc) to people that had no business buying a house that is way beyond their ability to afford. And builders got greedy too, buy building too many houses.

Where banks are regulated this is a non-issue (eg. Canada).

Answer 3

No, housing prices are falling beasue they were artifically proped up by low intrest rates before. This created a housing "bubble." The bubble burst and now housing prices fall. Banks etc were perhaps at little fault, but the biggest fault is the government because it encouraged the housing bubble with extremely low intrest rates, (Alan Greenspan admits to doing this) and "do gooder" faliure policies like trying to get everyone a house. Hope that helps.  

Answer 4

No, house prices in the US market are not much affected by the value of the currency in other nations.

They are falling mostly on high mortgage defaults, excess supply, and tight credit markets.

Answer 5

The bubble caused by too-cheap money and excessive credit, especially in the hands of those who were not creditworthy, has burst and prices will continue to drop until all of the excesses are wrung out of the market.  Prices should drop by half, and could go lower.

A "bubble" can ONLY occur when there is excessive credit and prolonged "easy money" policies, low interest rates, and the general public gets into the market on a speculative and highly leveraged basis.  It cannot happen where there is no or limited credit, very limited leverage, and only professional trading as opposed to man-in-the-street speculation.

The problem is too much credit, and that is a major cause of the dollar devaluation.  Too many fiat paper dollars chasing "the fad of the month club" like real estate.

How the economy goes from here depends on how many people who took out these mortgages live up to their agreements and pay.