When a house is not a home: Falling home values continue to strain American families

Armstrong Williams | 10/5/2011, 3:49 p.m.
The legendary crooner Luther Vandross' silken voice once enraptured audiences with the song, "A House...
At Thanksgiving, embracing the winds of change and increasing our faith

Communities are feeling the strain all over the nation from a declining tax base and increasing reliance of average Americans on public assistance programs, such as unemployment and food aid. Retirees are finding their options limited, as home values (which many of them were relying upon to fund their retirement) are declining, and social programs are under pressure due to government fiscal problems.

In fact, the gap between what most retirees want to sell their homes for and the demand for housing among first-time home buyers is growing increasingly wide. Amid falling incomes, pernicious unemployment and credit tightening by the banks, this situation looks intractable for the time being.

To compound matters, the government's (thus far failed) efforts to stimulate demand by increasing the money supply have lowered the interest rate that insurance companies and pension funds rely upon to pay out claims. The strain on savers due to historically low interest rates has driven many of them out of the usual safe harbors of government bonds and into the open sea of risk in search of higher investment yields.

No matter what investment fund managers say about the increasing value of so-called "emerging market investments," they are laden with unknown and unreported risks that may come back to bite retirement savings at a time when a large segment of the population (baby boomers) can least afford it. These financial professionals are playing a dangerous game with America's nest eggs, and they know it.

A house is certainly not a home when it's underwater. It's not a home when you can't afford to buy it, and it really loses its home feeling when families cannot form because of high costs and low wages. Whether Luther ultimately knew his song would apply to America's housing situation, we will never know. But it's hard to deny that he was onto something.

Armstrong Williams content can be found on RightSideWire.com. He is also the author of the new book "Reawakening Virtues." Listen to him daily on Sirius Power 128, 7-8 p.m. and 4-5 a.m., Monday through Friday. Become a fan on Facebook at www.facebook.com/arightside and follow him on Twitter at www.twitter.com/arightside.