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November 16, 2015 What’s Different about the Latest Housing Boom?
Reuven Glick, Kevin J. Lansing, and Daniel Molitor
After peaking in 2006, the median U.S. house price fell about 30%, finally hitting bottom in late 2011. Since then, house prices have rebounded strongly and are nearly back to the pre-recession peak. However, conditions in the latest boom appear far less precarious than those in the previous episode. The current run-up exhibits a less-pronounced increase in the house price-to-rent ratio and an outright decline in the household mortgage debt-to-income ratio—a pattern that is not suggestive of a credit-fueled bubble.
Because everyone is still stinging from the mortgage foreclosures.
That, plus the fact that the two current biggest generational demographics (Millennials + Boomers) are both looking for rentals rather than mortgages right now anyway, prior foreclosure issues or not.
That plus a significant number of purchases in the last few years to generate the rentals were cash purchases, no mortgage, from large holding companies.
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