The truth about the US housing market

Last week, the United States Case-Shiller 20-Cities Composite House Price Index took an unexpected plunge, falling 1.3% in October from a month earlier. Prices have now fallen by around one-third. Month-over-month prices fell in all metro areas covered by the index. And in six markets — Atlanta, Charlotte, Miami, Portland, Seattle and Tampa — house prices reached their lowest level since the housing bust began in 2006-07. The destruction of household wealth since 2007 has been shocking. According to the Federal Reserve, household net worth has declined $11 trillion from its peak in 2007. Relative to GDP, household net worth has fallen from around 470% in 2007 to around 375% currently.