Housing Market Improving Despite Lack of Gov't Support

As the Wall Street Journal reported earlier this week (you can read the entire article here), the housing market continues to show signs of improvement in recent weeks despite the government's half-hearted efforts to prop up the recovery. The fact is, the market is beginning to correct itself by prices lowering to levels that are within reach of many more Americans. Additionally, builders have curtailed building by nearly 80 percent which is allowing for inventories to drop to balanced levels.

As the Journal mentioned, the housing downturn was a classic bursting of an asset bubble, similar to the Nasdaq crashing in 2000. Eventually the asset (in this case, housing) finds equilibrium, which is beginning to happen. This isn't to say that we have turned the corner and all is good with the world. We still have many obstacles in front of us, particularly employment. But in order to recover, you have to reach bottom first and all indications are that we have arrived at the bottom.