As the housing market has floundered this summer, it's been up and down over the last year and a half and the Obama administration is not sure what to do next.
They implemented several programs in a hope to boost the housing market such as mortgage modification programs, low interest rates and several home buyer tax credits. Their goal was to stabilize the market until the economy could begin to make a recovery, but that is just not happening.
Now the Obama administration may be forced to choose between future homeowners and current ones.
There are some economists and analysts that feel that what the housing market really needs is a dose of reality and to let it drop naturally without any further intervention.
Experts argue that as prices drop lower, buyers will begin to pour in creating economic stability which is what the government has been spending billions trying to achieve.
Anthony B. Sanders, a professor of real estate finance at George Mason University said, "Housing needs to go back to reasonable levels. If we keep trying to stimulate the market, that's the definition of insanity."
Howard Glaser, a former Clinton administration housing official with close ties to policy makers in the administration said, "The administration made a bet that a rising economy would solve the housing problem and now they are out of chips. They are deeply worried and don't really know what to do."
Shaun Donovan, the secretary of housing and urban development, discussed yet another housing tax credit like the one that expired last spring which cost U.S. taxpayers about $30 billion with much of it going to people who would have bought a home anyway.
However, the administrations press officer's quickly downplayed Mr. Donovan's comment by saying that a new home buyer's tax credit was very unlikely or nearly impossible.
The administration is working to launch several new programs one of which is an initiative that will provide $3 billion to keep the unemployed from losing their homes and another is a refinancing program that will try to cut the mortgage balances of owners who owe more than their property is worth.
Today the average home takes over a year to sell.
Another proponent to let the market fall is Michael L. Moskowitz, president of Equity Now, a direct mortgage lender that operates in New York and seven other states. He says, "Prices are still artificially high. The government is discriminating against the renters who are able to buy at $200,000 but can't at $250,000."
A 10 percent or more drop in home prices could be very discouraging to millions of owners who are just hanging on, particularly people who purchased in the last couple of years under the impression that a turnaround had already begun.
To many, additional government intervention is not the answer. Even the National Association of Realtors is not asking for another stimulus and they were the driving force behind last years home buyers tax credits.
Right now the government is responsible for many home mortgages which is why Congress has been aggressively looking for stability. Sadly, what was used last year to aid the housing market could now be its downfall.