Sanibel

What Should Today's Median Housing Price Be?

I don't agree with this analysis. It does not factor in the level of long term mortgage rates. For example, under the analysis adopted here if long term mortgage rates droped to 1 percent or they rose to 12 percent, the outcome would be the same -- the current market is over valued. (Yes, I realize long term mortage rates won't go to one percent and are not likely to go to twelve percent any time soon). In other words comparing houseing prices to income does not tell us all of the necessary information. Housing purchases are leveraged investments. The lower the unit cost (ie. the montly mortage payment) the more you can buy assuming a constant total income.

Alan 'Not-Me' Greenspan Strikes Again

Greenspan caused the mortgage crisis by taking rates too low for too long and then raising them too high once he realized his mistake. I am glad a lot of people are not letting Greenspan get a pass on the mortgage crisis he caused.

He also caused the market bubble collapse. He had raised short term rates to 6.5 percent with no inflation in sight because he feared irrational exuberance. He was the one who was irrational.