It has been a decade since the bubble burst and now many local markets have fully recovered from the collapse. For some, however, recovered is too light a word. In 40 percent of metro areas, prices have reached new peaks, and an additional 30 percent of metro areas are within 10 percent of their previous peak, CoreLogic reports. The national index, however, is still 4 percent below its peak nominal value.
Despite the fact that new peaks are being reached, no one should be too concerned about another housing market crash. Why? Because the previous housing crash was spurred by easy credit and investor frenzy, while the increase in prices this time is being driven by good job growth increasing demand while tight inventory continues to play a role in curbing that demand.
Prior to the Great Recession, the housing market was the tail wagging the economic dog, David Stiff writes, while this time it is the economic dog that is in charge of the housing tail.
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