patrick.net

Logan, thank you for sharing.

Price to income ratio has always been one of the key indicators in whether the housing market growth is sustainable.

On falling homeownership, the real worry is educational attainment--not student debt loads http://brook.gs/1UvZzeg

Let's see what happens when a 20% down payment is required, interest rates return to a historical norm, and buyers are required to have half-way decent credit. Watch prices come crashing down, just like 2008.

Logan, that's not necessarily the case.

By increasing the educational attainment of the individuals represented by the blue line, the effect will be to bring down the red and green lines. The pie is only so big, isn't it? That might be your next lesson at Anderson ;-)

Go Bruins, class of '04 here!

jvolstad says

Let's see what happens when a 20% down payment is required, interest rates return to a historical norm

They will never do something as crazy as mandate a 20% down payment in America.

Rates move with inflation

BayArea says

By increasing the educational attainment of the individuals represented by the blue line

Median base pay for college grads 2014 $ 48K-54K adjust that to wage growth numbers for private sector contract jobs = your future home buyer

Service sector, low educated, low service pay jobs = life long renter unless you're a 2nd wage earner that has a better paid partner

What happen in 1996-2007 wasn't a bubble, it was great economic demographics, but... we had way too many natural renters become home owners and then the speculation factor kicked in which allowed too much leverage debt into the system that has a non capacity owning factor to the model

Massive Massive uptick in demographics for 1980's and 1990's not so much lately, but demographic economics for housing ownership will be positive soon. However, no more exotic debt left, which is very healthy, no more speculation, have to earn it now. This is a positive

What happen in 1996-2007 wasn't a bubble

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I wish i could book your bets

errc says

I wish i could book your bets

Not all that demand was fake, demographic economics for housing was good, the prime age labor force which was great for housing peaked in 2007 and we are slowing growing that again.

The Bubble aspect came in 2003-2006 where the speculation factor and the over investment thesis came into play in a major factor with a big multiplier effect.

So, 1996-2007 wasn't a bubble but 2003-2006 was a mass over investment thesis bubble on the worst kind of debt to an economy... Housing debt.

When you have that kind of speculation and over investment, then you get a blow out tops in construction and sales and then big massive drop off in demand for both

DieBankOfAmericaPhukkingDie says

jvolstad says

Let's see what happens when a 20% down payment is required

You radical types are scary.

History will repeat itself:
Housing will crash
Foreclosures will jump
Investors will swoop in
Home builders will stop building
Rents will go sky-high.