Obama's Mortgage Modification Program A Colossal Flop

[Geee]

Investors Business Daily:

If housing tends to lead economic recoveries, then we're in trouble. This marks the worst post-recession home-buying market since the Great Depression.

Nobel laureate Professor Vernon L. Smith, who delivered the keynote address at the Cato Institute's 30th Annual Monetary Conference on Nov. 15, noted how housing leads both recession and recoveries.

"In 11 of the past 14 recessions, you're having a decline in housing leading that recession. And all recoveries with the exception of — if you want to call this a recovery we're in — with the exception of this recovery, housing has always come back after a recession," said Smith.

He's right. New home sales are still about 66% below what they were in 2003, when prices were roughly the same as they are today.

That accounts for 368,000 new-home sales annualized in October, compared with more than 1.1 million in September 2003. The prior month's sales were revised down by 20,000, too.