Balance in our Future?

Implications: While sub-prime mortgages were always a small component of the market it had a much larger impact during the 2004-2006 period.  
Its decline is part of the reason for the recent decline in the housing market.  The possibility of it affecting other types of mortgages exists.



Analysis: I am not sure how an "infection", as the author calls it, from the sub-prime mortgage market spreads to the prime market.

I see the return to rationality in the mortgage market as a good thing for the overall industry. Standards are good. Quality is good. 25% house appreciation year after year is simply not sustainable and to think that the small correction we are having is bad is somehow missing the point.

We are actually trying very hard to return to balance and these are all good signs.