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follow Patrick 2018 Jun 3, 3:35pm
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Friends, this thing is getting pricey. Valuations are still far short of peak levels, when they reached 72% above the historical median. But at the current 28% above the median, we are well above the highest valuation achieved outside last decade's epic housing bubble.But then there's that mortgage rate thing... while rates are far off the lows in a relative sense, they are still very low historically. ...The relationship between rates and prices is more nuanced than many people believe, as I discussed in the second article linked above. But I think it's reasonable to believe that the prolonged period of low rates has played a big role in helping get valuations up to these levels. If rates were to return to more normal-ish levels, that could very well pressure valuations down towards more normal levels as well.