No government cure for housing pain

A good editorial from the Orange County Register:

http://www.ocregister.com/opinion/home-loans-buyers-1810407-subprime-mortgage

For the longest time, Orange County residents have gleefully watched their home values escalate nearly beyond reason. It was almost too good to be true – for homeowners, anyway – as home values have basically tripled in the past nine years. But when something seems too good to be true, it usually is too good to be true. So now the market is self-correcting....................

The housing market, though, is working itself out. The government should not intervene with either bailouts or regulations. Lenders are becoming more careful (some argue they are become too careful as an overreaction to the problem), unqualified buyers are now less able to get loans, and home prices will no doubt start coming back to reality. With less equity available, homeowners will also be spending less money on remodeling and other consumer spending, at least for now.
That's how markets work. There is no way to avoid some pain. As one an old saying puts it, "capitalism without failure is like religion without sin."