To Err is Human, Bernanke?

Someone goofed and I think it was the reporter.

“The declines in home prices have contributed to the rising tide of foreclosures.”

Whoops.

Not a true statement. The way this sentence is constructed suggests that because home prices are falling, people are loosing their homes. People don't loose their home because prices are low. Low prices should create an uptick in the housing market. People loose their homes because they are not able to pay their mortgage payment in full and in a timely manner.

It should have said,

"The rising tide of foreclosures have contributed to the declines in home prices."

When foreclosures occur, these properties are priced lower because:

1) The lender is really only looking to recoup their losses plus the market rate value of the home.

2) The more cheap housing is placed and stays unsold on the market, the more property valuations will be pulled lower for the entire market, region, state, your hometown, your neighborhood, and your street.

See Article: Little foreclosure relief seen from housing bill