Interesting article from Newsweek this weekend regarding the potential of another housing bubble looking. The author focuses in on two statistical drivers to make the case that a housing bubble may be around the corner. First, he looks at the inflation-adjusted housing price indices. This index measures how much housing prices have risen relative to prices in the economy as a whole. Currently, that index measures in at 94.6. Without diving in to exactly what that number means we can compare it to the same index number in March 2006 right before the housing collapse and see that it was 92.3 at that time. This means that housing prices are rising at a much higher rate than prices in the economy as a whole. That is not good. Second, the house price to median income index measures affordability relative to the average person's salary. In November 2005 this number stood at 7 and now it stands at 6.7. So we see that housing prices are rising faster than other prices while affordability is trending into a danger zone. When Covid-19 hit in March 2020 the Fed stepped in a bought up 30% of the entire mortgage backed security market to prop up housing and keep pumping up the economy. It seems that short term fixes to allow the billionaire class to significantly increase their net worth is the only driver of modern economics in America and the world. But every action like this has blowback and it seems that dumping a lot of over-priced homes onto everyday consumers before pulling the plug is the go to move by the Fed in the 21st century. Hopefully things will continue to trend upwards but I can't help but get the feeling that we are headed into another housing crisis at some point in the next few years.