American households have lost $6.8 trillion in residential real estate values while mortgage debt has increased. The banking Stockholm Syndrome.
The equation is simple because people that make less money can only afford a certain amount of home. The only reason to keep home prices inflated artificially was to appease those with tremendous amounts of housing debt. It took four years for some to see the light (many have not) yet trillions of dollars are now out the door under false pretenses for something that was going to happen anyway. In the end we have created the biggest moral hazard with housing as the centerpiece in this modern game of Monopoly. Yet after all the pain and economic suffering that Americans have suffered and with obvious culprits, nothing has occurred to fundamentally change our banking system.