Obama Has Re-Inflated The Housing Bubble

[Geee]

Investors Business Daily:

Subprime 2.0: It's now official: The affordable-housing policies promoted by this administration have fed another housing bubble. Data show it started in 2011. Only question is when it will collapse.

 

Obama Has Re-Inflated Housing Bubble

 

When housing prices outpace rental costs, it raises flags. Price-to-rent ratios have risen sharply over recent quarters, mirroring the steep gain at the start of the 1997-2007 bubble.

 

While housing prices in real terms are still far below 2007 levels, they are back to 2003 levels.

 

Between 1997 and 2002, the average compound rate of growth in home prices was 6%, double the rate for rentals, American Enterprise Institute scholar Peter Wallison notes. This occurred independently of monetary policy, as the Fed over that period raised rates.