THE problems in the housing market continue to put downward pressure on the economy. Economist Larry Lindsey, my colleague at AEI, recently noted in The Weekly Standard that things are likely to get a lot worse before they get better. Lindsey pointed to a sobering statistic. There are currently 129 million homes in the United States, and 18.5 million are empty. Prices clearly will have to come down a lot to clear such an inventory.
It can take hundreds of thousands of dollars to build a home. How can it be that so many came to be empty?
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