US housing recovery peters out, prices are again falling

There was a fleeting moment in 2010 when it looked like the US housing market might have stabilized. Then came the Eurozone crisis, spreading gloom and uncertainty across the globe.

Now you might ask how the instability of a small European economy like Greece could undermine the housing market of the largest economy in the world. The answer comes in two parts; factual and rhetorical.

Starting with the factual; the Eurozone crisis is no longer confined to Greece; the continent is now, metaphorically speaking, going down in flames.

Turning to the rhetorical, Europeans were quick to point the finger westwards when this crisis started, arguing that subprime loans in loser cities like Detroit could bring down European financial giants like Fortis and RBS. Now, it is the turn of the Americans to point the finger, and this time the direction is eastwards.