Is the U.S. Housing Market Headed for Collapse?

There are some, and their numbers are growing, who feel the U.S. housing market is headed for collapse. Here are some of the reasons they cite:

• New home sales are at an all-time low.
• Because of this, construction of new homes has all but come to a standstill
• The Mortgage Bankers' Association reports home loan applications are at a 13-year low
• Foreclosures continue to rise. The glut of bank-owned properties further depresses real estate values.
• Because of the number of foreclosures and bank losses, banks are tightening their credit standards to those last seen in the early 1970s, which will further depress the market.
• Home prices are still far above 90% of Americans' ability to purchase a house. The law of supply and demand dictates prices will fall until demand matches supply.
• People need jobs in order to buy houses, and with unemployment near 10%, that isn't happening.
• Bankruptcies continue to rise, up 32% in 2009 over 2008.
• The giant tax credit that artificially pumped up the housing market last year is gone, and the government can't continue to fund it.
• Fannie Mae and Freddie Mac, the "twin pillars" of the housing market, are in total shambles. It's estimated it could take another $5 TRILLION to fix them. But Fannie, Freddie and the VA back over 90% of mortgages.
• The overall U.S. economy is drowning in debt. Consumer, government and business debt is in the neighborhood of 360% of gross domestic product (GDP). This debt bubble is about to burst.

Any way you look at it, the forecast isn't good for the housing industry.