The Last Housing Crash Is Not Even Over But Bernanke Is Already Setting The Stage For The Next OneMichael Snyder, Contributor So what did the Fed decide to do to fix things? They decided to push mortgage rates even lower. But even with mortgage rates at exceptionally low levels, new home sales in the United States continue to hover around record lows. Does this look like a housing recovery to you?. Of course we are not experiencing a housing recovery. In order to have a housing recovery, people need to be able to afford to buy homes. And most of the new jobs that our economy is producing are low paying jobs. As I have written about previously, only 24.6 percent of all jobs in America today are good jobs. But if you dont have a good job you cant afford to buy a good house. So unless Federal Reserve Chairman Ben Bernanke can somehow magically make millions of good jobs fall from the sky, the truth is that we actually need housing prices to fall so average American families can afford them. When we push families into mortgages that they cannot afford, large numbers of them end up defaulting on those mortgages. As the following chart shows, mortgage delinquencies continue to hover around all-time record highs. Right now mortgage delinquencies are about 5 times higher than they were a decade ago. So the foreclosure nightmare is far from over. There are going to be millions and millions more families that are going to lose their homes eventually. In fact, there are some very troubling signs that things are taking a turn for the worse. -In the state of Illinois, the number of foreclosures is increasing again. -In the state of New York, the number of pre-foreclosure notices has absolutely exploded over the past two years. -In the state of California, mortgage delinquency rates are absolutely frightening. We dont want housing prices to rise until incomes start rising again. We dont want to pump up home values and then get millions more American families to agree to mortgages that they cannot handle. We need homes to be priced at levels that American families can afford, but Bernanke seems to think that rising home prices will solve our problems. And in some areas of the country home prices are actually rising. We are seeing a lot of investors and foreigners come in and pay cash for homes in many of our major cities. Meanwhile, hard working families all over America are wondering why things never seem to work out for them. If Bernanke really wanted to fix the housing market, the following three things would help. 1) Let the free market determine housing prices. Eventually home prices would fall to levels where people could afford them. 2) Stop manipulating mortgage rates and let the free market determine them. Eventually they would settle at a level that is good for both consumers and financial institutions. 3) Tell banks to only make home loans to people that can afford them. But the central planners over at the Federal Reserve are not going to do those things. Instead they are going to keep printing money, keep manipulating interest rates and keep trying to create another housing bubble. The mainstream media insists that QE3 is going to create more jobs, stimulate economic activity and significantly improve the housing market. Of course the first two rounds of quantitative easing did none of those things, but somehow everyone seems to think that by doing the same thing again we will get a different result this time. But what the first two rounds of quantitative easing did accomplish was that they padded the profits of the big banks. And apparently QE3 is already accomplishing that. The following is from a recent CNBC article Bank profits from new mortgages have soared since the Federal Reserve began its third round of bond purchases two weeks ago,fuelingthe debate over the fallout of the latest dose of quantitative easing. The extent to which QE3 drives down new mortgage rates and helps homeowners or is pocketed by banks will be crucial to the success of the policy and the prospects for growth in the U.S. and global economies next year. The big financial institutions always seem to win, and we always seem to lose. Isnt it wonderful? So once millions more American families lose their houses and most of us cant afford to buy homes, where are we supposed to live? Well, I have a few suggestions. You could live in an abandoned automobile factory. You could take over a convenience store and live there. You could build an underground shelter and prepare for the coming financial crisis. You could construct a tree house in the middle of a forest and get away from it all. Does anyone else have any other suggestions? This article first appeared here at the American Dream. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here. linkwithin_text=Related Articles: 