Housing Market Is Heating Up, If Not Yet Bubbling

Rapidly rising home prices have led to speculation about another bubble taking shape. The results of a survey of home buyers in May and June suggest that while no bubble is currently in place, there are indicators that one may be forming. The poll — which asked recipients how much they expect residential prices to increase in 2014 and each of the next 10 years — did not convey the belief that prices can only go higher, although the theme of temporarily low interest rates continued to prevail. Americans are not embracing “irrational exuberance” about home investing as they did in the past, but neither are they being completely realistic. The mindset of most prospective buyers is that America is gradually recovering from a recession and that this is a good time to purchase a home. They mostly do not seem to be motivated by the anticipation of another housing boom. The annual survey, launched in 2003, is conducted by Robert Shiller of Yale University and Karl Case of Wellesley College. | Read More