Central bank intervention in the form of ZIRP (zero-interest rate policy) is responsible for a re-inflation of the housing market as this chart above shows.Of course the
filthy rich closest to the Fed spout get the really good deals because the money they borrow to buy housing is almost free while the rest of US downstream have to bid against all-cash investors looking for yield in a low- interest economy. Of course when the wealthy give up looking for a killing in an over-priced housing bubble, it will burst again. In the "other America", the one of low wages and long hours, the mortgage debt to wages ratio is more than double the historic ratio of about 63%:
Twenty percent of Americans buying a home are underwater meaning their home equity is exceeded by mortgage debt. They cannot participate in the inflating housing market either. This situation of diminishing returns for increasing amounts of debt is called "recovery"....If you have a minute there is a bridge in Brooklyn I'd like to talk to you about.
