Bad News is Good News
This article from the Wall Street Journal states, among other things, that housing starts are at their lowest level since 1991. The tone of article is negative, but to me the lack of housing starts is going to lessen supply, which should help stabilize prices. So the bad news is good for the housing market. The housing market peaked in late summer 2005, so we are now two-and-a-half years into the decline. I still think the floor in housing prices was hit late last year. I will find out over the next several months as sales data is released.

The huge bank write-off announced this week are also positive for the housing market. Another case of bad news being good news. The banks can start with a clean slate and get back to making loans.

Another positive sign is the Fed's willingness to cut interest rates. The ten-year Treasury is under 3.7%, and if you believe Goldman Sachs and Pimco's Bill Gross, its yield is heading to 3.0%. This makes mortgage payments lower and houses more affordable.