By Jann Swanson | Mortgage News Daily
In the past four years housing prices, according to CoreLogic’s Home Price Index (HPI) have risen 40 percent. So, are we heading toward a repeat of the 2005-2006 housing bubble? In a two-part analysis in the current issue of CoreLogic’s MarketPulse, Mark Liu, principal economist, offers some reassurance.
First he defines just what a bubble is, using the words of Nobel Laureate Economist Joseph Stiglitz. “Ideaf the reason that price is high today is only because investors believe that the selling price is high tomorrow – when ‘fundamental’ factors do not seem to justify such a price – then a bubble exists.” Under that definition Lieu says, the high price growth rate alone is not evidence of a housing bubble.
