Must-Read: Kevin Drum: We’re Now In the Second Biggest Housing Boom of All Time

Must-Read: There were three good reasons in the mid-2000s to believe that housing prices should jump substantially. The coming of secular stagnation—then called the “global savings glut”—greatly boosted demand by boosting how much households could afford to pay for America. The filling-up of America restricted supply: first cars and superhighways had meant that for nearly three generations there were greenfield potential housing sites within thirty minutes of everywhere, but that ended with the twentieth century. At some point the anti-global warming carbon tax will come, and when it does auto transportation will become much more expensive and that will tilt the location price gradient. How much were these worth? Not enough to boost housing prices to their 2005 values. But plausibly enough to boost housing prices to their values today. IMHO, the best way to view the graph is as a positive “displacement” boom caused by true fundamentals, a bubble upward overshoot, a crash downward undershoot, and now (we hope) equilibrium:

Kevin Drum: We’re Now In the Second Biggest Housing Boom of All Time: “The most remarkable feature of this chart… http://www.motherjones.com/kevin-drum/2017/04/were-now-second-biggest-housing-boom-all-time

…is that between 1953 and 1997, average housing prices increased by zero percent. Zero…. The second most remarkable feature of this chart is, of course, the insane Bush-era boom. Here in California we considered the 80s boom to be a very, very big deal. But it was a mere blip. The Bush boom was without precedent. Finally, we get to the third most remarkable feature of this chart: the Obama-Trump era boom that’s happening right now…. So what happens next? Are things really different this time, and home prices will stay permanently high? Or are we due for another housing bust? Beats me…