Article Image
News Link • Housing

What Happens After the Housing Bubble Reflates?

•, By Staff Report
 Now, the larger question begins to percolate: Are houses cheap because of fundamental economic factors or for monetary reasons? After all, if central banks print lots of money – as they have been – then people are making more money.

The result is that wages are up while house prices have not yet begun to catch up. Wages drive rents upward and rents drive housing prices. Here's more from the article:

It looks like under [a] baseline assumption, it's cheaper to buy than to rent in every one of the top 100 metropolitan areas in the United States. In traditional hotspots like the San Francisco Bay area, New York City and Orange County, CA, the discount is low. Still this is a recipe for fundamentals house price appreciation.

If housing prices merely stabilized into a sustainable equilibrium with rents then the future probably wouldn't be too dramatic. We would see a rapid shoot-up in home prices now, followed by a long period of little to no price growth as the Fed raised interest rates.

Join us on our Social Networks:


Share this page with your friends on your favorite social network:

Purse.IO Save on All Amazon Purchases