In less than twenty-five years, government “affordable housing” and other housing policies have turned a healthy market into a financial ruin. Until Fannie and Freddie’s market dominance and the government’s role in the housing finance system are substantially reduced or eliminated, the United States will continue to have an inferior and unstable housing market.

Unlike in the United States, any losses from property market lending are likely to be absorbed by the state. And they will be done so in a manner that will not impair the Chinese banking system's ability to extend credit as was the case in the United States.

The most persuasive case for the cause of the financial crisis is the U.S. government itself.

Has the U.S. housing market hit bottom?

No serious observer of the Federal Housing Administration (FHA) believes its financial future is bright. But few recognize just how troubled this government agency really is.

FHA Watch, a new monthly online publication, will focus on the government’s 100 percent taxpayer-backed Federal Housing Administration (FHA) mortgage guarantee program and the risks it poses for taxpayers, families, and communities. 

The current housing mess does have an explanation.

As a result of the high loan limits and the suppression of private securitization through the obstacles and disincentives listed below, approximately 90% of all originations and 99% of all securitizations are now government guaranteed. This is an ongoing liability for the taxpayers and an unhealthy fiscal position for the United States.