
Ordinarily, housing market pricing gets pushed up to the limit of affordability. Chronic shortages of housing keep prices high, and homebuilders respond by providing new homes to meet the demand. In short, demand nearly always outpaced supply. In the aftermath of the housing bubble, that is no longer the case. Many of the houses built during the rally of the housing bubble were a response to artificial demand caused by unstable loans being given to people who didn't have the capacity to repay the debt. As a result, homebuilders produced many homes that were not necessary, and to make matters worse, the people to whom these houses were sold now have bad credit, so demand is curtailed until their credit…[READ MORE]