Current Housing Boom Feels Different as No Bust is in Sight

House for sale in Chicago


When the housing market tanked several years ago, it made many people aware just how fragile the economy — especially real estate — is. Although the housing boom had many people feeling like they were on top of the world, the bust left many people all across the country struggling to keep their homes. With a new real estate boom in full swing, many are worried that history is only going to repeat itself. For those who are just getting back on their feet, the thought of having to endure another real estate bust is overwhelmingly unbearable.

However, according to a recent report released by the Federal Reserve Bank of San Francisco, “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.” In the study, the bank researched numbers dating back to 2002 and compared them to today’s situation. While researching, they also found that, “The price-to-rent ratio for housing is a valuation measure that is analogous to the price-to-dividend ratio for stocks. Dividends are the cash flows from stocks. Service flows from housing are called imputed rents. Higher valuation ratios imply that stock investors or homebuyers are willing to pay more for each dollar of dividends or imputed rent than they have in the past. Throughout history, extremely elevated valuation ratios have been associated with asset markets that have crossed into bubble territory.”

This news will certainly put a lot of people at ease, and also help them have a little more understanding of what to look for when it comes to the ebbs and flows of the real estate market.

 (Photo by Scott Olson/Getty Images)

Attic Design Backyard Design Basement Design Bathroom Design Bedroom Design Closet Design Dining Room Design Fireplace Design Ideas Kitchen Design Landscaping Ideas Lighting Living Room Design Office Design Shower Design Ideas Swimming Pool Ideas
dining room table with floral centerpiece
10 Dining Table Centerpieces For Your Home
10 Living Rooms With Beautiful Ceiling Designs
small rolling kitchen island
10 Amazing Rolling Kitchen Island Designs
Building a Better Bathroom: 5 Tips to a Successful Renovation
4 Common Ways Your Home Fails & How to Resiliently Conquer Those Issues
5 House Maintenance Tips for Seaside Homes
wooden closet organizer
10 Of The Most Helpful Closet Storage Ideas
LAs Signature Palm Trees Are Disappearing
5 Tips For Finding A Job In Los Angeles CA
Art And Design Group Transform Parking Spots Into Temporary Public Parks
5 Reasons You’ll Love Living In Alexandria VA
people hanging out in a park
5 Reasons Chevy Chase MD Is The Perfect Suburb
Chris Christie Sworn In For Second Term As Governor Of New Jersey
5 Things You Should Know About Living In Trenton NJ
large saltbox house design
10 Classic And Beautiful Saltbox House Designs
beautiful blue lego house
10 Of The Coolest Lego Houses You’ve Ever Seen
Outdoor Elegance: Gorgeous Gazebos and Pergolas!
front view of class house in mexico city
This Mexican Home Made Of Clay Is Full Of Light