ECOMINOES: Housing Recovery? No, Housing Bubble 2.0
By Seth Mason
Investors are once again throwing cheap, Fed-provided capital into real estate, promoting price increases and inflating a new housing bubble. If the “recovery” in the housing market were legitimate–i.e. if it were a function of an expanding economy and consumers were driving the market–one would expect the number of mortgage applications to be increasing. An increasing number of mortgage applications, see, would be a natural byproduct of more Americans are getting hired, earning more, and buying houses. But, of course, this isn’t the case because this isn’t a recovery.
In reality, the number of mortgage applications has been shrinking, both in real terms and in terms of year-over-year change:
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