The national housing crisis is over.***

New York should worry.

New York did well in the housing and credit boom, because the money for all of those cheap mortgages flowed right through Manhattan to the rest of the country.

New York did OK, too, in the housing and credit bust.

The Federal Reserve and both political parties, led by former President George W. Bush and President Obama, have believed that the way to fix the national economy is to pump trillions of dollars into the nation’s financial system.

Much of that money, too, went through Manhattan — although much of it didn’t so much go through Manhattan as get stuck here.

Now, despite the best efforts of both Bush and Obama to somehow save housing from free-market forces, the national housing crisis has pretty much saved itself.

After six long years, housing prices have simply hit bottom — and have nowhere to go but up (albeit possibly very slowly).

As Standard & Poor’s announced today, home prices in and around 10 cities were up 0.6 percent in July from last year. A broader 20-city index showed a 1.2 percent increase.

There were a few exceptions, though: Atlanta, Chicago, Las Vegas … and New York.

Indeed, S&P notes that “New York was the only city with a worse 12-month decline in July than June.” That is, year on year, New York real-estate prices are falling faster, relative to the same time last year, than they were last month.

The decline makes sense, if housing is a proxy for New York’s future economic performance.

As the nation’s economy recovers, the Federal Reserve and the elected branches of government will see less need for all of that fiscal and economic stimulus that goes through Gotham.

At the elected-branch level, such “stimulus,” by now, is mostly just extensions of temporary Bush and Obama tax cuts.

But for the Federal Reserve, it means zero-percent interest rates. Yes, two weeks ago the Fed said it was “likely” to keep rates at “exceptionally low levels … at least mid-2015.”

Wall Street seems to take this statement as a blood oath.

Consider, though: First, rates would still be “exceptionally low” even if the Fed doubled them.

Second, the Fed eventually will have to see if the housing market can withstand even the smallest interest-rate increase.

Third, no matter what, time marches on — and to investors, 2015 will soon enough be two years and then 18 months away. They’ll have to start planning for rates hikes.

Rate hikes could do untold damage to a financial system that remains brittle and dependent on cheap federal funding.

Banks are underwriting and lending cheap money for decades based on today’s record-low rates. If and when rates rise, they’ll take big losses.

Yet at some point, Washington is going to have to choose between protecting the financial system — and protecting a recovering economy from the distortions that a still-dysfunctional financial system is creating in the economy.

New York will bear the brunt if and when the Fed chooses the latter.

***Offer not valid in Northeast.

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The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.