How to Fix the Housing Market

Washington says it wants to help homeowners, but so far it hasn't. Here's what might actually work

Vincent Laforet

Las Vegas has borne the brunt of the housing crash, with plummeting home values and a spike in foreclosures.

Here's a thought: let's have the government do something to fix the housing market. Now what would that be?

Ideas are flying around Washington. They include tax credits and cheaper mortgages for home buyers as well as leaning on lenders to rewrite mortgage terms for struggling borrowers. But maybe we should ask what, exactly, fixing the housing market means--and prepare ourselves for the limits of what these policies can actually accomplish.

Consider our recent track record. Last July, Congress passed a bill to help the housing market. In an effort to churn demand and stabilize home prices, the bill created a...

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