Don't Fear Falling Home Prices

If we keep our income at current levels and home prices go down, we are actually richer; we can buy more housing for the same dollar, and for a smaller portion of our disposable income. So, what's wrong with falling prices? I believe there is a misconception that houses will always appreciate. Sometimes people will imagine that it is possible to have continuously rising home values and affordable housing. The problem is that the two don't happen at the same time! Some say "life just isn't fair," and they are probably right. Even so, you either get high home prices or low home prices. And I happen to think that lower home prices are what we all really want, and therefor shouldn't be afraid of lower prices. Most of us care about our children and grandchildren, and want them to be able to buy affordable homes. Why would we want high prices? What I want is economic growth and reasonble appreciation that keeps me ahead of inflation. If we can get through the mortgage and subprime problems with fewer casualties, that will be wonderful; but, I fear there will be many casualties inspite of anything the Fed might do. When all the proverbial dust settles, I think we will get back to affordability in most of our neighborhoods, and that will be good for all of us.