The headline writers who earlier this week said that July's home sales drop came despite falling home prices need to check out this Arnold Kling piece. In addition to including a delicious zinger at the new missions of Fannie and Freddie, Kling longs for the order of a far less government-encumbered market.
When houses are "owned" only because the government is supplying lenient, subsidized credit, that is disorder. Given this disorder, rational people do not wish to buy. The rational person wants to buy low, sell high, not buy when the market is rigged to try to keep prices higher than they should be.
HT: Ariel Goldring