Borrowers with good credit are now the number one defaulters on ARM (adjustable-rate mortgage home loans) across the nation, primarily due to huge job losses, salary constrictions, credit difficulties and ballooning costs--including those costs incurred through the rising price of crude oil, which, though many economists claim is a positive thing and signals the economy is recovering, is ultimately only a purely negative thing. This makes up a HUGE concern within the housing market and is a serious detriment to those that hope the housing market is primed to bottom up in the very very near future.
Then again, home prices are back to "2002 levels," according to recent polls, while salaries are in the early 90s, the labor market is equivalent to the number of workers in 1999 and 2000 (meaning that if every high school graduate and college graduate in America since that time frame didn't need jobs, we'd have a 0.0% unemployment rate right now), and the stock market is at pre-1998/1999 levels, so perhaps we need housing prices to fall even more--maybe into the mid-late 1990s levels...probably averaging another 5-10% across the board, with more of a 10-15% drop in value and cost here in the northeast and mid-Atlantic, where prices have been the most stubborn to hold onto their high prices and values.
I suppose the only true way to reverse the economic downturn is job creation.
Going back for a moment to the previous topic--oil prices are an inflation all their own, and many economists and tv/radio pundits refuse to acknowledge the fact that gas and groceries are still being purchased in huge quantities and are recession-resistant--unlike Prada purses, people cannot just stop using/requiring them. But a rise in both will cause a swift secondary recession. Investing in stocks seems safer anyway, so many question is: why are investors swarming to oil? Do they really think it will hit $147/barrel again, and stay there long enough to produce each of them a profit? I think people are thinking too short-term as opposed to the guaranteed long-term gains of stocks and bonds.