With the Fed action yesterday of drooping the Fed Funds Rate 25 basis points, expect inflation to creep up. Does the government want this? I believe it does.
If we get inflation flamed up, it will cause the price of everything to rise, including housing. After all, it is the fall in housing prices that caused this recent "crisis" in the first place. Who cares that is was the Fed's cheap money policies that created the false boom in housing.
If people begin to realize that their cash is losing value every day, they will begin to put it in hard assets like real estate. This will support housing prices (and borrowing) and get them rising again. Appreciate will keep people from walking on their mortgages and get speculators back in the market to buy up the excess units. Unfortunately this will create false boom II.
During this entire affair, the savings of everyday Americans will now be devalued. This is most certainly a tax, but most people will never realize they are paying it.
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