Filed under: Centex Corp (CTX), Toll Brothers (TOL), Housing, Cramer on BloggingStocks

TheStreet.com’s Jim Cramer says until the public feels they won’t lose money on a home, no problems will get solved.

Would you ever buy a house in this environment? That’s really the ultimate question that has to be asked — that the Fed should be asking — if this junk is ever going to come back to life.

I know some of it is so short-term that the jury’s back and the verdict is guilty, but most of it hinges on a simple issue: housing depreciation. If you think that your house is going to lose value, default on the second home lien. Which then, we know now, means defaulting on the ultimate mortgage.

The Fed can tinker with LIBOR (I still can’t believe they wasted the banking system’s time with the LIBOR/auction plan). It can issue statements that are a little more pro-growth than neutral.

Or it can try to change the psychology of the home buyer and homeowner.

Continue reading Cramer on BloggingStocks: Fed needs to focus on home prices

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This entry was posted on Friday, December 14th, 2007 at 2:12 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.