Distressed homes, including foreclosures and short sales typically sold at deep discounts, accounted for 29% of all sales at last count. The national median existing home price for all housing was $174,000 in July, down 4.4% from a year earlier. That represents 9.4 months of supply at the current sales pace, up from 9.2 months in June. inventory of existing homes available for sale was 3.65 million at the end of July. Data from the National Association of Realtors shows the U.S. Foreclosures are increasing the supply of properties on the market, and sapping demand by killing the confidence of prospective buyers. The predicament is a result of several things, notably the enormous foreclosure problem of the U.S. Alexander says the United States is caught in a liquidity trap - a situation in which the traditional reaction of the economy to lower interest rates is impaired. Even if you fill up the gas tank to full your car doesn’t go any faster.”Mr. It’s like driving your car and you have a gas tank that’s half full but your transmission is shot. And I don’t believe that additional stimulus will have a really significant impact on the economy because I think the monetary policy transmission mechanism is broken. “I don’t think it solves the problems in the U.S. Quantitative easing isn’t the silver bullet people may think it is, Mr. This advertisement has not loaded yet, but your article continues below.