According to an article written by Cyril Moulle-Berteaux in The Wall Street Journal “The Housing Crisis is Over”. I for one was very happy to hear this news as I was starting to get discouraged by all the doom and gloom I hear every night on the news. According to this article we have reached the bottom of the housing market and the trend will now start to go up from here. As stated most people don’t realize we have been in a down market now for three years, the peak took place in July of 2005.

A lot of the data used to compile the information which is being fed to us through various media sources are based on income and interest rates being compared from the 1970’s and 80’s when put into today’s prospective are vastly askew. Back in 1981 mortgage interest rates were 18.5%. Currently a 30-year fixed-rate mortgage can be obtained for less than 6%.

Much of the analysis used to bring us this glimmer of hope has to do with new home starts. The inventory of new home completions is now just under new home sales. The decline in construction will likely continue through 2008. It is estimated that sometime in 2009 the inventory will reach a level significantly below new sales which will then have a direct effect on tightening home prices.
To say we are experiencing a crisis in our housing market with serious economic consequences that are still unfolding is a spot on analysis. The good news as Cyril so eloquently puts it “housing led us into this credit crisis and recession and is likely to lead us out. The process is underway, right now.”

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