Saturday, October 1, 2022

FOMO Helped Drive Up Housing Prices in the Pandemic. What Can We Expect Next?

Existing home prices in the United States soared 45 percent from December 2019 to June 2022, when Covid emerged and then gripped the nation. That rate of increase over such a short interval had never happened in the history of the U.S. national home price index, dating back to 1987, which the economist Karl Case and I first developed.

Now that growth in the index has started falling on a month-to-month basis, with the annual growth rate down from 18.1 percent in the year ending in June 2022 to 15.8 percent in the year ending July. This may seem a small drop, but it is important to note because it’s the largest deceleration in the history of the index and comes in the face of strong momentum in home prices. It leads one to consider whether the forces behind that 45 percent increase are going to continue.

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Tuesday, February 8, 2022

Inflation Is Not a Simple Story About Greedy Corporations

The word “Bidenflation” appeared in the news last summer, politicizing inflation and assigning blame for it. By December, the Consumer Price Index had risen 7 percent from a year earlier, the largest annual increase since the end of the Great Inflation, the period of entrenched inflation from 1965 to 1982.

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Monday, October 25, 2021

Should You Buy a Home in the US?

Even at currently elevated US home-price levels, buying still makes sense for those who are set on ownership. But buyers need to be sure that they can accept what could be a rather bumpy and disappointing long-term path for home values.

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Saturday, October 2, 2021

Stock, Bond and Real Estate Prices Are All Uncomfortably High

The prices of stocks, bonds and real estate, the three major asset classes in the United States, are all extremely high. In fact, the three have never been this overpriced simultaneously in modern history.

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Saturday, April 17, 2021

Looking Back at the First Roaring Twenties

We are in a second Roaring Twenties, or so you might think, from the countless comments suggesting that we are entering an exuberant decade that echoes the one of a century ago.

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Sunday, December 6, 2020

Making Sense of Sky-High Stock Prices

Many have been puzzled that the world’s stock markets haven’t collapsed in the face of the COVID-19 pandemic and the economic downturn it has wrought. But with interest rates low and likely to stay there, equities will continue to look attractive, particularly when compared to bonds.

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Friday, October 23, 2020

People Fear a Market Crash More Than They Have in Years

The coronavirus crisis and the November election have driven fears of a major market crash to the highest levels in many years.

At the same time, stocks are trading at very high levels. That volatile combination doesn’t mean that a crash will occur, but it suggests that the risk of one is relatively high. This is a time to be careful.

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