1.0Liberty Street Economicshttps://libertystreeteconomics.newyorkfed.orgpeterstevenshttps://libertystreeteconomics.newyorkfed.org/author/peterstevens-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-2-3/rich600338<blockquote class="wp-embedded-content" data-secret="3mbl77ph9R"><a href="https://libertystreeteconomics.newyorkfed.org/2021/09/does-the-rise-in-housing-prices-suggest-a-housing-bubble/">Does the Rise in Housing Prices Suggest a Housing Bubble?</a></blockquote><iframe sandbox="allow-scripts" security="restricted" src="https://libertystreeteconomics.newyorkfed.org/2021/09/does-the-rise-in-housing-prices-suggest-a-housing-bubble/embed/#?secret=3mbl77ph9R" width="600" height="338" title="“Does the Rise in Housing Prices Suggest a Housing Bubble?” — Liberty Street Economics" data-secret="3mbl77ph9R" frameborder="0" marginwidth="0" marginheight="0" scrolling="no" class="wp-embedded-content"></iframe><script> /*! This file is auto-generated */ !function(d,l){"use strict";l.querySelector&&d.addEventListener&&"undefined"!=typeof URL&&(d.wp=d.wp||{},d.wp.receiveEmbedMessage||(d.wp.receiveEmbedMessage=function(e){var t=e.data;if((t||t.secret||t.message||t.value)&&!/[^a-zA-Z0-9]/.test(t.secret)){for(var s,r,n,a=l.querySelectorAll('iframe[data-secret="'+t.secret+'"]'),o=l.querySelectorAll('blockquote[data-secret="'+t.secret+'"]'),c=new RegExp("^https?:$","i"),i=0;i<o.length;i++)o[i].style.display="none";for(i=0;i<a.length;i++)s=a[i],e.source===s.contentWindow&&(s.removeAttribute("style"),"height"===t.message?(1e3<(r=parseInt(t.value,10))?r=1e3:~~r<200&&(r=200),s.height=r):"link"===t.message&&(r=new URL(s.getAttribute("src")),n=new URL(t.value),c.test(n.protocol))&&n.host===r.host&&l.activeElement===s&&(d.top.location.href=t.value))}},d.addEventListener("message",d.wp.receiveEmbedMessage,!1),l.addEventListener("DOMContentLoaded",function(){for(var e,t,s=l.querySelectorAll("iframe.wp-embedded-content"),r=0;r<s.length;r++)(t=(e=s[r]).getAttribute("data-secret"))||(t=Math.random().toString(36).substring(2,12),e.src+="#?secret="+t,e.setAttribute("data-secret",t)),e.contentWindow.postMessage({message:"ready",secret:t},"*")},!1)))}(window,document); </script> https://libertystreeteconomics.newyorkfed.org/wp-content/uploads/sites/2/2021/09/LSE_2021_dif-HP-growth_rodriquez-440_x_256.jpg440256House prices have risen rapidly during the pandemic, increasing even faster than the pace set before the 2007 financial crisis and subsequent recession. Is there a risk that another dangerous housing bubble is developing? This is a complicated question, and the answer has many components. This post, the first of two, provides a more detailed look at the recent rise in home prices by breaking it down geographically, with a comparison to the pre-2007 bubble. The second post looks at the potential risks to financial stability by comparing the currently outstanding stock of mortgage debt to the period before the financial crisis and projecting defaults should prices decline.