I’m in Las Vegas to study the housing market at an American Action Forum event. Honestly. The U.S. housing market isn’t in great shape, as everyone knows.
What is to be done? As has been widely documented, the mortgage-foreclosure problem has shifted from being concentrated in non-prime borrowers to being dominated by prime borrowers. And as the less-than-stellar recovery has elongated, default and foreclosure have been concentrated more heavily in areas where prices are falling and unemployment is high.
At the same time, the administration should simply acknowledge that its array of small-bore housing programs failed at the outset and have outlived their usefulness. It is time to cease and desist further meddling and let the markets clear as fast as possible.
A comparison of Phoenix and Las Vegas makes this point. Phoenix has benefitted from a more rapid clearing of its excess inventory and more rapid economic growth. That’s a lesson from Las Vegas for the nation as a whole.