This post was a really important idea and statement when the government was talking about buying up troubled assets. It is not so important now since the the government has moved to providing loans to banks and car makers. In other words, the post would have been great and insightful had things turned out different.
What I really need right now is the government competing against me buying homes. In other words, the last thing in the world I need right now is the government propping up home prices.
I don't think home prices are not going up in the near future. The number of people buying homes is not getting higher (higher unemployment). The supply of homes of the market is only increasing or at least it is not going down. I live in an area that has escaped much of the home depreciation. But I think there is a some of risk in buying a house, especially since I think the area I am in is just behind the rest of the nation.
If the government steps in and starts buying homes, they are just going to raise the price for all the other buyers. The government will not be inclined to get good (or as good) deals as a private motivated buyer would be. Keep in mind, that they will not be spending their money. They will pay more than what the market will bear and keep the prices higher than what the market would have paid. Both bad things for the first time buyer, who is the first link and spring board in the entire housing chain.