On the heels of today's bad news about home prices, the National Association of Realtors (NAR) poured a little gas on the fire. Today, it reported a 12.8% year-over-year drop in home sales.

Forget that misleading, 4.3% month-to-month drop that the NAR would prefer glazed-eyed news organizations to report. It's the yearlies that matter, and this truly awful performance will, I believe, lead the NAR to make yet another adjustment to next month's home sales forecast.

Oh, and we can also forget the NAR's headline. "Home Sales Drop on Temporary Mortgage Problems" is absolute bunk. There's nothing at all "temporary" about the situation in mortgages. Lenders like Impac Mortgage Holdings (NYSE:IMH) and NovaStar Financial (NYSE:NFI) are dead in the water, along with dozens of others. Survivors like Countrywide Financial (NYSE:CFC) are reduced to wandering about, hat in hand, looking for bailouts from old friends like Bank of America (NYSE:BAC).

That's because all those defaults dried up the supply of money to fund gimmicky new mortgages, and that's what was powering the housing bubble. Not solid economic growth. Not increases in population. Not good jobs. It was greed and bad lending, greased by fancy financial derivatives that hid the risk from naive buyers -- until that risk showed up. Now that the easy money is gone, and banks like Washington Mutual (NYSE:WM) have buttoned up their low-end lending, with mortgage packagers like Bear Stearns (NYSE:BSC) losing that gravy train, there's nothing left to bounce housing back to its prior levels.

It may look rough down there, but that's only because we're coming out of la-la land. Where we're headed is back to normal, where a house is not an investment, it's just a place to live. That's really not that scary for most people. For those who did unwise things with their money, the story will be different.

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At the time of publication, Seth Jayson, a top-10 Motley Fool CAPS player, had no positions in any company mentioned here. See his latest CAPS blog commentary here. View his stock holdings and Fool profile here. Fool rules are here.