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The future of housing in the U.S. has been in the news a lot lately. On Monday, the NYT splashed its front page with the eye-catching headline "Let the Market Fall." On Sunday, a different article appeared lauding the emergence of no-down payment mortgages with strict lending criteria. Then today, an article by an economist questioning whether housing is a staple or a luxury good. (The answer is "luxury good," because housing prices increase with incomes, not with the lower rate of inflation, which is good news because it signals a faster recovery in housing prices.)

How does all of this fit together? Readers must be concerned about the housing market, which is way down after being artificially inflated for awhile by the first-time homebuyer's tax credit, which was increased and extended to even non-first-time homebuyers. So, now the question is what to do? Do we roll out more programs designed to help new buyers purchase homes? Do these programs really help new buyers, or do they allow sellers to sell their house at an inflated price? Or, should the government not do anything, but let the market fall. Really fall.

A lot of this depends on your demographic. If you are just now entering the workforce at lower wages than in previous years, then you should want your housing price to be lower as well. If you are thinking of retiring, selling your home and moving to assisted living, then you would want the market to stay propped up. If you are in danger of losing your house, and selling is your only option, then you might also want higher prices. If you're in the middle like most of us, if we were going to sell our house we'd have to buy another house, so it may be a wash. If you a locality that relies on property taxes to fund services, then you might also want the higher prices to stay around awhile. (And, if your dad is a homebuilder/developer like mine is, then you know what the answer is!)

And your role of government intervention may go back to the question of whether housing is a staple or a luxury good. Shelter may be a necessary staple, but housing in general goes beyond mere shelter.

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The future of housing in the U.S. has been in the news a lot lately. On Monday, the NYT splashed its front page with the eye-catching headline "Let the Market Fall." On Sunday, a different article appeared lauding the emergence of no-down payment mortgages with strict lending criteria. Then today, an article by an economist questioning whether housing is a staple or a luxury good. (The answer is "luxury good," because housing prices increase with incomes, not with the lower rate of inflation, which is good news because it signals a faster recovery in housing prices.)

How does all of this fit together? Readers must be concerned about the housing market, which is way down after being artificially inflated for awhile by the first-time homebuyer's tax credit, which was increased and extended to even non-first-time homebuyers. So, now the question is what to do? Do we roll out more programs designed to help new buyers purchase homes? Do these programs really help new buyers, or do they allow sellers to sell their house at an inflated price? Or, should the government not do anything, but let the market fall. Really fall.

A lot of this depends on your demographic. If you are just now entering the workforce at lower wages than in previous years, then you should want your housing price to be lower as well. If you are thinking of retiring, selling your home and moving to assisted living, then you would want the market to stay propped up. If you are in danger of losing your house, and selling is your only option, then you might also want higher prices. If you're in the middle like most of us, if we were going to sell our house we'd have to buy another house, so it may be a wash. If you a locality that relies on property taxes to fund services, then you might also want the higher prices to stay around awhile. (And, if your dad is a homebuilder/developer like mine is, then you know what the answer is!)

And your role of government intervention may go back to the question of whether housing is a staple or a luxury good. Shelter may be a necessary staple, but housing in general goes beyond mere shelter.

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