Ritholtz Says Home Prices are Still Too High

“The data suggests home prices will continue to drift lower for a couple of years – maybe just go sideways for a decade.”

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The federal government is looking to rent foreclosed homes that are owned by Fannie Mae and Freddie Mac. This is completely absurd. The government, being poor allocators of capital and poor investors, thinks it would be better off renting homes rather than selling them. Are you kidding?

Investors are buying most of the foreclosed homes anyway, especially in the most distressed markets. Investors, being much more savvy financially then the federal government, will buy and rent them anyway. If the government engaged in the’ buy, rent, sell business’, my guess is that it would be so inefficient that it would create another money pit for taxpayers.

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