Overvalued housing prices should have continued to fall over the past two years. Instead, values were propped up and even artificially inflated in some markets through subsidized demand. Today, there are an incremental 900,000 to 1.5 million housing stimulus homeowners with little to no equity in their new purchases who will be underwater in the months to come. The Government has created a new supply of foreclosures, delayed a resolution to the economic downturn, and done so at extraordinary cost.
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