With the passage of a short-term economic stimulus package, Congress must now turn its attention to a broader multipronged Plan for Economic Recovery. Agenda item number one: a program to stem the vicious downward spiral in the housing market. More than 1% of U.S. households entered the foreclosure process last year, up by more than 75% over the previous rate. In addition to the pain caused to the affected homeowners, foreclosures affect our neighborhoods and communities. And foreclosures further depress house prices, which have plummeted by 8% from last year. How far must home values fall before we reach the bottom? Contagion from the housing crisis is drying up credit markets from prime housing to commercial paper to state and local government bonds. We face a vicious downward spiral, not just in house prices, but also in credit markets and the real economy. Could government action restore financial stability and confidence and head off a long period of real estate and community decline? If so, what steps can government take? If no action is taken now, what may the future hold?
Please join the Center for American Progress Action Fund, Chairman Barney Frank, and a panel of housing market economists and policy experts for a discussion of the how severe the crisis may yet become and a range of policy measures that Congress is considering.