With U.S. home prices back down to their 2009 lows, you might be wondering what all the government programs to stabilize the housing market have accomplished.
And for good reason. Various federal initiatives, especially the first-time homebuyer’s tax credit, seemed to put a brake on the three-year dive in prices from July 2006, the peak, to April 2009. Home sales and prices bounced, only to hit the skids when the program ended in April 2010. Which is what you’d expect when the government stops cutting checks for $8,000, payable to the homeowner on completion of his purchase.
Was the two-year respite worth it? Would prices have fallen harder and faster if left to their own devices and now be showing signs of stabilization?
It sure seems that way. Instead, two years and billions of dollars later, home prices are back to their 2009 lows, according to the S&P Case-Shiller Index for February. (For sticklers, the unadjusted index was actually 0.01 point higher than in April 2009.) More here.