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Are we in a housing bubble (and will it burst?) Video

Is this now a housing bubble? Some Federal Reserve officials are concerned that the housing boom is beginning to look like a bubble, said Jeanna Smialek at The New York Times. Robert Kaplan, president of the Federal Reserve Bank of Dallas, said last week that he was becoming “nervous” about the conditions of the housing market. “Several of Kaplan’s colleagues harbor similar concerns.” Home prices are rising at a double-digit pace this year. Some feel that the central bank’s big purchases of mortgage bonds “could be helping to inflate” the market by keeping mortgages cheap, “inspiring people to borrow more and buy bigger.” That’s leading to bidding wars and frustration among buyers eager for more space. Reining in the Fed’s spending because of housing specifically, however, could “slow the overall economy” and lead to job losses.

This article was first published in the latest issue of The Week magazine

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Are we in a housing bubble (and will it burst?) Video

Boston Real Estate for Sale

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