Why There Is No Housing Bubble

MSN Money correspondent Jim Jubak's take on the housing bubble talk. Jubak says that with the 10-year Treasury bond yielding below 4% and 30-year mortgages available at 5.1%, there isn't a housing bubble. He states that what we are seeing in the housing markets is monetary inflation. Pure and simple. Economic theory says that when more money chases a limited quantity of goods, the price of those goods increases. So nationally, cheaper money drives up the price of houses--which does lead home builders to increase supply at higher prices. In many markets, adding supply is harder to do. The big caveat is interest rates. As long as they stay low, the boom will continue. If they rise slowly, the market will slow down slowly. If interest rates rise quickly, the bubble can pop, but all indications are that that is not going to occur. Another interesting take on this crazy housing market. More...