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First of all the housing news for some areas of the country are just plain bleak.  This past week the news came out that 1 in 10 homeowners are in default.  That is higher than it was 2 years ago. 

Second it is estimated that 600,000 households slipped underwater on their mortgages in the fourth quarter.  That means that they owe more on their house than it is worth.  The breaking point where homeowners simply stop paying even though they can afford to make the payments is when negative equity reaches 25%.  And the number of people growing with negative equity is faster than expected.

Third, this time around the tax credit has not been working.  Well that makes sense.  Because all those people that were going to buy did on the first tax credit.  They just pushed up their purchases.  Also I have been hearing some real problems actually getting the tax credit from the government.  It was the same problem that auto dealers had with getting the cash for clunkers from the FED.  When people hear about that they get nervous.

Many economists believe that we have yet to hit bottom.  I agree.  Too much supply, too little demand (although it is going up some), and too many government programs to confuse the market. 

Some markets in Wisconsin have stabilized.  But recently I have noticed that some of the markets that had been stable are starting to slip again.  The reason is the tax credit.  The first credit simply pushed up purchasing with a flurry of demand.  Now that the demand has "dried up" values start to slide and supply grows. 

I really don't see any good news for the present housing situation until unemployment starts to take a noticeable decline.  Most will say that the recession is over, but employment always lags the indicators.  However the one elephant in the room is the national debt.  If we don't get a handle on it FAST the debt will short circuit recovery because eventually those interest rates are going up.  And rising rates put a damper on recovery.

Then we have Fannie and Freddie continuing to loose billions.  The government has poured billions into these failed institutions.  Heads should roll.  Somebody is doing a terrible management job.

If the Obama Administration and the Congress continue on this entitlement and spending frenzy we are in for a major disaster.  Look at what is happening in Spain and Greece.  Their debt is causing major EURO issues.  Hold on to your hats if you think that is bad.  Obama must stop this head long determination to add a trillion dollar health care entitlement.  We can't afford it.  He must start using some sound fundamentals about getting jobs back, such as putting confidence in the American public there is SERIOUS effort to take care of the national debt and keep taxes down.  Too much of it now is lip service.  Pay as you go is a phony political posturing.  So far it has no basis in reality.