The media somehow still cannot see the housing bubble even as it collapses in front of their face. The NYT has an article today reporting on race and gender discrimination in the issuance of mortgages in the context of a rash of foreclosures in inner city Baltimore neighborhoods. It only notes in passing that the price of homes in the neighborhood in question "nearly doubled since 2004."
If the homebuyer who is the central figure in the article were able to pay the 2004 price for the home that she purchased in 2006, then she would not have faced any difficulty paying her mortgage even at reset rate on her subprime adjustable rate mortgage. Of course, if she only had to borrow half as much money to buy her home then she would have been far more likely to qualify for a prime mortgage.
The mortgage industry deserves to be held accountable for the abuses in the subprime market, but it was incredibly irresponsible for the government to have policies that pushed moderate income people to buy houses at bubble inflated prices. The media were also incredibly negligent in failing to recognize this situation while it was taking place. It is ungodly incompetence for them still not to be able to recognize this situation after the fact.
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