Housing's Anti-Bubble

U.S. home prices are soaring to levels near or surpassing pre-recession peaks, but does not necessarily signify a looming bubble.

The July reading of the S&P CoreLogic Case–Shiller U.S. National Home Price NSA Index showed 6.4 percent growth year-over-year for May 2018; each month since August 2016 has had at least 5 percent annual gains, according to the index. Yet, wages have not grown with home prices, and are in fact falling for many American workers, which presages softening home prices, CityLab reports, and is causing buyers to take pause. The pause is not cause for alarm, however, as the "relative dearth of banditry today," by speculators, along with less construction stand in stark contrast to the last housing bubble, writes Kriston Capps, revealing that housing is in a frustrating, but more stable place.

Housing prices are cooking. Across the nation, the price of homes is rising faster than the rate of inflation—in some places by a factor of three. That’s true of high-cost cities such as Seattle and San Francisco and lower-cost cities such as Charlotte and Tampa alike. And the overheated market for homes is costing the middle class the American dream.

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