It’s Not a Bubble if it Doesn’t Burst


Posted To: MND NewsWire

Someone must have passed a law; if it is November, you must publish something debunking bubbles. The saturation point is near, but the latest contribution, from Freddie Mac’s Chief Economist Sean Becketti, provides a better (and much longer) analysis than most, so we will attempt to summarize his arguments as to why, despite rapidly rising home prices, we aren’t in a bubble. Or as he says, “Not yet.” The concern, he says, is understandable. Scars remain from the last bubble and there are plenty of warning signs regarding a new one: House prices have been on a tear for the last five years, growing about twice as fast as the long-run average and outpacing income growth by a cumulative 42 percent over the last 17 years; The number of large metropolitan statistical areas (MSAs) with unusually-high…(read more)

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