Housing Headwinds Begin

Housing prices and transactions have rebounded over the past year in stunning fashion, reversing from contraction into expansion, and they are now on a new bubble trajectory. The year-over-year average national rates of appreciation, according to the S&P/Case-Shiller home price indices, have advanced by about 12% in the past year.

Rates of appreciation in the southern half of California, Phoenix and Las Vegas are 20% to 25% on average. The 10-year rolling national average rate of appreciation at the most recent bubble peak in 2006 was 12.5%. The sustainable and historical multi-decade average is about 5.5%. The current trajectory for home values has been engineered by way of cheap debt capital from the Fed, coupled with inventory restrictions from the banks....553 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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