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February 20, 2012 06:04 AM

actvra.in/trp

Let’s see if I have this straight:

Home prices fell in November and hover near recent lows: S&P/Case-Shiller 20-city report. rates for a fixed mortgage remain at an all-time low: Freddie Mac and more people can afford to buy a home now than in decades: NAHB/Wells Fargo Housing Opportunity Index .

The country’s Gross Domestic Product continues to climb: Bureau of Economic Analysis and the stock market is at the highest level since 2008. Wall Street Journal.

So, why aren’t more people buying a home?

Is this yet something else we can blame on our financial institutions? I’m reading a lot of gripes about overly restrictive lending conditions facing potential homeowners as the main reason for the lag in home buying.

Not too many years ago, those same institutions were being criticized for not having standards that were restrictive enough. Then, the argument was the banks were writing too many mortgages to high risk borrowers who weren’t able to meet their obligations.

Apparently lenders need to be tough enough with their standards that those getting a mortgage won’t default on them — while being lax enough to finance consumers who want to take advantage of current market conditions. That seems to be a fine needle to thread.

And I thought cold call phone sales were tough. At least I don’t get blamed for a recession or the inability to end one.

Personally, I question if all of the fault lies where the fingers are being pointed. I wonder if a big part of the reason for the buying hesitation comes doesn’t come from:

• A stunned feeling many still are recovering from that was left behind by the market’s recent crash.
• A lack of confidence now shared by those who once believed real estate was a rock solid investment.

How could consumers be anything else after the recent ride? Currently nearly one in four homeowners remain upside down with their homes: Wall Street Journal and article after article predict another wave of foreclosures to hit the market in the near future.

Considering real estate’s recent track record, I suspect many consumers wouldn’t take out a mortgage today with 0 percent interest rates.

Sometimes, mistakes can’t be fixed and with this issue there is plenty of blame to go around. But when will real estate professionals again enjoy a strong, healthy, active market?

Someday. But it probably will take longer than it takes to drop interest rates to record rates or to have a home lose 40 percent of its value.

What will take more time is to rebuild the faith consumers once had in real estate. Our once positive, confident view of real estate has been wounded. Not critically, perhaps, but bad enough the market may be limping for some time into the future.

Or maybe it’s just all the banks’ fault.