Housing plunge: The worst is yet to come

... everything I see tells me that, despite the sharp declines already recorded, a steeper plunge in home values is dead ahead. The reason: So far, most of the troubles in the housing market have been caused by bad mortgages going sour. Meanwhile,-- the more common causes of housing slumps — high interest rates, rising unemployment, and recession — are just starting to kick in. And … -- the most powerful causes — depression and deflation — are still on the horizon.In the boom leading up to the Great Depression of the 1930s, most Americans did not borrow money to buy a home. Variable rate mortgages didn’t exist. And Wall Street investors rarely got involved in the business of financing homes. Home prices did fall dramatically. But those price declines came mostly after the stock market crashed, after the economy shrunk and after millions of workers had lost their jobs. The crux of the problem today: That phase of the housing crisis still lies ahead.