Bubble Or Not, High Home Prices Can Hurt

USA Today, reports on the rising home prices nationwide, and states that the high housing prices are keeping buyers out of the market, making it harder for firms to attract workers in pricey markets and breeding high consumer debt and speculative buying. Many economist warn a major swath of the market is at risk for a price correction. Nationally, home prices have jumped an average of 50% in the past five years, doubling in California and rising about 80% in Nevada and Hawaii, according to the Office of Federal Housing Enterprise Oversight. In an April USA TODAY poll of 55 top economist, three-fourths called the housing market overheated, though they differed on whether they expect a gradual cool-down or a sharp drop in sales and prices. Nationally, an NAR survey shows affordability still in a healthy range. But some cities, the rising prices are affecting not only the lower income buyers, but the middle class too. The cities with the highest prices are in California and the east coast cities. Very interesting article to get a national perspective of the housing market. More...