Housing Crash continues...NAR predicts same old same old

Our good friends over at the NAR have - SURPRISE SURPRISE - revised their predictions.

What's this then? You mean to tell me the housing market hasn't rebounded? But the NAR has predicted a rebound every month for about a year now. I'm shocked, shocked I tell you than they are wrong yet again. Here is a prediction: they will predict a rebound next month as well.

Does anyone out there believe a word these people say? Have they any shred of respectability left? Well I'm sure Larry Kudlow digs these guys, I could see him being their spokesman.

Let's recap why housing is crashing and will continue to do so for the next foreseeable future:

1. Houses are too expensive still. When it takes 5, 6, 7 even 10 times annual income to buy a starter home, something isn't right. And it is not sustainable either.

2. The days of mirror test mortgages are over. Today someone actually needs VERIFIABLE income and a decent credit score to get a loan. In most cases a down payment is needed as well. Good luck finding Americans with more than $12.87 in a savings account. And the days of the 1% ARM $700K loan available to someone making $40K a year are gone as well. Lenders have woken up the fact that when one's mortgage is 60% of his income, he will not pay the loan back.

3. People aren't morons. They will not go out and blow $500K on a home just because they see an ad on TV from the NAR saying now is a good time to buy. Well OK some people will, but most won't.

4. Renting costs less than owning. When you can rent a house for $1500 a month or "buy"it for $3000 a month, there is no reason to "buy". Oh sure you build equity and get a tax deduction. So you spend $1500 more a month to save $500 in taxes and build $300 in equity. What a deal!