Why falling house prices matter

There's no problem with low house prices, says Merryn Somerset Webb. It's what happens to the economy as they are falling that's the problem.

Every time I write about house prices, people ask why it matters if prices fall. After all, they're far too high. So the lower they go and the faster they hit bottom the better right? Yes and no.

There is no fighting with mean reversion and, bar a few speculators, we all want housing to be affordable. The problem is not with the end result of house price falls it's in what happens along the way.

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