patrick.net

Well, they were right. Ain't no housing bubble now, huh?

"The New York Fed study said although house prices have risen strongly, increases in family income and low mortgage rates have meant that homes remained affordable, while demographic forces have also supported demand."

This is true as far as it goes but failed to understand that rising real estate values were shoveling cash into the wider economy, a stealth stimulus much greater than the 2001-2003 tax cuts, especially for the non-wealthy.

This NY Fed piece was propaganda in justifying the ending of the low interest rate regime.

http://research.stlouisfed.org/fred2/series/DFEDTAR

The Fed also failed to account for the suicide lending products that were newly available, "affordability" lending that allowed borrowers 2 to 5 years of fuse time before their loans blew up on them. Once the prices started coming back down, millions of buyers in the 2003-2006 period were left high and dry.

Let's see, official Fed policy is that bubbles are impossible to see except in retrospect. So obviously they are not going to start talking about a bubble, much less do anything about it.

Likewise, permanent official policy of the NAR is that *NOW* is a good time to buy, in fact it's never been a better time. Go out and buy a house *NOW* through a licensed Realtorâ„¢. And don't worry about price. It's impossible to overpay, and even if you somehow do you'll be better off in the long term.

Greenspan and Yun will not be regarded well in history.