You'll Find Bargains in Housing, but Not Yet

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Not yet. Not yet for housing. Miserable numbers. Numbers that will most likely cause more people to pause their buying despite the low mortgage rates and the pick-anything-you-want house.

We are getting prices falling at a clip where you are going to be able to buy houses for a discount that could be as much as 30%, which is the average amount that new homes from the major homebuilders have fallen.

The big issue, as always, is that when you buy an asset for $400,000, you are looking at a decline of about $100,000 at this pace over the next year. Minimum.

That means the average down payment gets wiped out in a year, and you have negative worth in your house. That triggers renting and staying put.

The house price depreciation is still at the root of the crisis, even as oil is out of control. There are not a lot of companies that will lose their viability -- airlines, of course -- with higher oil. Their profits will simply be hurt.

But house price depreciation continues to play havoc with the banking system. The Fed has always been adamant that we are going to have some banks fail. And homebuilders. The fact that it hasn't happened yet still shows the worst case isn't here.

Silver lining? How about this? You are going to buy houses at prices below where they have traded this decade. That's going to be a fabulous windfall for those who stay put. For those who own already, other than the people who have bought since 2005 -- roughly 14 million people -- the hit will be absorbed psychologically, not financially.

Small recompense. But it is something.

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