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Housing Up, Home Ownership Down
The Mysterious New Housing Bubble
by
Mike Whitney
What's Holding the Economy Back? The Collapsed Housing Bubble, End of Story
The rebound in housing is now in full swing. Housing starts are up,
existing home sales are gaining pace, inventory is down, and prices are on
the rise. According to a recent report by Corelogic “House prices are up
6.3% year-over-year in October, the largest increase since 2006 and the
eighth consecutive increase in home prices nationally on a year-over-year
basis.” Many experts are now predicting that 2013 will be even better, in
fact, J.P. Morgan thinks that prices could gain another 10 percent in the
next 12 months. Here’s the story from the Wall Street Journal:
“J.P. Morgan Chase Co. expects U.S. home prices to rise 3.4% in its
base-case estimate and up to 9.7% in its most bullish scenario of economic
growth. Standard and Poor’s, which rates private-issue mortgage bonds,
on Friday said it expects a 5% rise in 2013.” (“Home Prices Could Jump
9.7% in 2013, J.P. Morgan Says”, Wall Street Journal)
And the housing boom is having an impact on Wall Street, too, where
prescient investors who loaded up on mortgage-backed securities (MBS)
are cashing in bigtime via the Fed’s new MBS-buying program dubbed
QE3. Fed chairman Ben Bernanke is paying top-dollar for financial
derivatives that, in real terms, are probably worth just pennies on the
dollar.