Consequences

The government has worked to keep house prices high. New entrants to the housing market are paying inflated prices; and they are defaulting at inflated rates.

IrvineRealtor has a great post today, which includes this graph.



Government insured loans for first-time home buyers (FHA loans) from 2008 -- from AFTER the bubble had begun to burst -- are performing as bad as the toxic loans made in the run-up of the bubble.

The government is keeping housing prices inflated so that new home owners can overpay for properties they cannot afford, default, and trash their credit. You want to buy a house? The government is setting you up for failure.