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Renting a House is Good.

The value of US residential real estate at bubble peak was about $25 trillion, mortgage debt constituted about 45% of that ($11 trillion) and owner equity of 55% ($14 trillion).

House prices;
Current fall from bubble peak - 23.4%
Projected fall, peak to trend line - 45.75%
Predicted loss, today to bottom - 26.0%

Peak value of $25 trillion, the current value is about $19 trillion, and the long term trend line value will be about $13.5 trillion. Homeowner equity will drop by 70% - if you have a typical debt-to-value ratio of 80%, your equity is going to zero. This only takes a 20% fall in the house price for that to occur, this is why so many households are now underwater. 

House values have receded not quite halfway to their long term trend line. We are still nowhere near a house price bottom. With the Feds artificially propping up the real estate market and banks holding foreclosed properties off the market, or refusing to foreclose so as to not have to recognize failed loans on their balance sheets, the housing recovery will endure much more pain before a long slow recovery can take place. 

The really sad fact is as with most inflated prices that fall back to a long term trend line, the price tends to over shoot and bottom below the long term trend line, taking that much longer to return to normal. As with all government interference in the market place (in the name of "fixing things") it ends up, not only costing the taxpayer more of their hard earned dollars, but unnecessarily delays the healing process of the market place. 

Charts & Graphs; 

Disclosure: No position.