Econintersect: The rapid rise in home prices over the past two years has been proclaimed by some analysts to indicate a housing market recovery. But recently some have argued that the price increases are not healthy and indicate a new housing bubble could be starting. GEI Analysis has several articles every month tracking and interpreting housing market data.
One new reference (Chart of the Day) indicates that prices are rising at a faster rate over the past six months than any other time on record.
Econintersect has added annotations on the graph, which are shown below:
Since the median real household income has been declining in recent years it might be argued that the normal range should be moving lower as incomes decline. The new normal may be a little lower than the old normal.
At any rate, there appears to be no basis to argue that the record rate of house price increase is sustainable. Recent news would support the idea that the market for houses could be softening as mortgage interest rates have spiked and mortgage applications fallen.
What would you call prices going parabolic when demand appears to be rolling over? Econintersect would call that a bubble.
Sources:
Chart of the Day (11 September 2013)
Global Economic Intersection Analysis articles.