Home Building Continues

By Econ70 | 06/26/2013
A picture of the inside of a room with a bunch of stuff on it.

Despite Case-Shiller showing a 12.1% rise in home prices for the year ending 4/13, it’s probably the end of big price increases. The recent jump in mortgage rates (which reduces demand) and the first sustained month-over-month increase in housing inventories (which increases supply) will moderate future price rises. But probably not new residential construction as…

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Painless Price Rise

By Econ70 | 05/23/2013
A man in a tuxedo giving a presentation.

Despite the recent rise in house prices and residential shelter costs comprising 32% of the CPI, rising house prices won’t, in the short run, worsen inflation. This is because the CPI does not look at house prices, but rather the cost to rent a dwelling (owner-occupied or rented). And since house prices and rents are…

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Houses for Nothing

By Econ70 | 01/22/2013
A green background with the words " phelps and lau."

According to CoreLogic, house prices rose 7.4% for the 12 months ending 11/12 (6.7% excluding short sales), the best numbers since 5/06! With 30-year mortgage rates at 3.4%, this means that the real cost of financing a home is NEGATIVE 4%! That’s like getting paid 4%/year to buy a house. As a result, it’s not…

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