Saturday, June 11, 2016

The Overinflated Fear of Being Priced Out of Housing

Rising home prices set off fears that real estate will become even more expensive, making it impossible ever to buy a home in a given city.

It’s easy to understand how such worries spread, but the historical record suggests that these fears are generally exaggerated. Cities with steep price increases today will probably have much smaller upticks in the future. And for the most part, differences in price increases among cities are well explained by short-term variations in employment growth.

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