The Most Splendid Housing Bubbles in America, May Update: Mania at the Eve of Holy-Moly Mortgage Rates
The Most Splendid Housing Bubbles in America, May Update: Mania at the Eve of Holy-Moly Mortgage Rates
Abstract
These rate locks were based on interest rates in effect roughly from November into February, when the average 30-year fixed rate ranged from 3.2% to 4.2%, with the majority of the time being below 3.8%. These are the rates that funded home purchases reflected in today's home price index. The overall National Case-Shiller Home Price Index for "March" released today spiked by 2.6% from the prior month and by a record 20.6% year-over-year. San Diego metro: Prices of single-family houses spiked by 3.7% in "March" from the prior month, and 29.6% year-over-year. The index value of 417 means that home prices exploded by 317% since January 2000, when the index was set at 100. With an index value of 410, house prices exploded by 310% since January 2000, despite the plunge in the middle, crowning the Los Angeles metro the Number 2 most splendid housing bubble on this list: Seattle metro: House prices spiked by a holy-moly 5.6% for the month, bringing the two-month spike to a good-lordy 10.2%. Year-over-year, the index spiked by 27.7%. Since January 2000, house prices spiked by 302%, 4.3 times the rate of CPI inflation: It's house price inflation. The Case-Shiller Index is based on the "Sales pairs" method, comparing the price of a house when it sells in the current period to the price when it sold previously. At an index value of 263, the metro has experienced 163% house price inflation since January 2000, 2.3 times the rate of CPI inflation.