Wall Street dipped again during trading yesterday, as investors continued to shy away from financials after other sectors of the economy showed little promise for growth. The NASDAQ suffered the worst performance by dropping 0.92 percent (20.13 points) on the day. Both the Dow Jones (0.38 percent, 39.21 points) and S&P 500 (0.40 percent, 4.33 points) finished lower on the day.

After the opening bell today markets dropped quickly below the marks set yesterday. The Dow was down nearly 100 points after the first hour, meaning investors in Wall Street could be in for a long and arduous day of trading.

The housing market is expected to be the driver of Wall Street momentum today. Unfortunately, that means we are in for a bumpy ride.

According to Bloomberg News, sales of existing homes in the U.S. dropped in July 2010 – this after sales of new homes also put up uninspiring numbers that month. Purchases of existing structures dropped a staggering 13.4 percent from June to July. Thanks to an expiring homebuyer tax credit and a weakening economy America’s home market is stagnating quickly.

There are millions of unsold structures sitting on the market in the U.S. This has a double effect of both costing the current holder extra to maintain, and bringing down the prices of neighboring homes – having a “for sale” sign on your neighbor’s lawn for months reflects poorly on every home in the area.

According to Reuters, China is tackling its housing problem with increased direct spending on public housing projects. China and the United States have opposite problems in housing, but the solution to both is intense government attention. In China the government is trying to keep home prices from soaring out of control by increasing the amount of affordable public housing.

In the United States we could keep prices from falling of a cliff by decreasing the number of units available. China has too few homes; America has too many. Just as Beijing intensifies its efforts to create housing opportunities for its citizens, Washington should be looking into ways that it could buy excess units off the market – either holding onto them through the storm, or converting them to public spaces such as parks, playgrounds, or habitats.

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