The housing bubble is even bigger than the stock market bubble; Jim Belfiore checks in with insight.

By Mike Shedlock | The Street

Stocks may be expensive based on historical measures, but it’s nothing compared to skyrocketing home values says Robert Shiller. 

Consider that the Case-Shiller National Home Price index has gained in excess of 6% per year on average since January 2012, while net rental income has barely kept up with inflation, increasing just less than 2% per year. The result is that home prices seem as overvalued as they were in the spring of 2005, nine months before the peak.

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“I do not believe this, at least as it relates to Arizona. The NAHB / Well Fargo Housing Opportunity Index, by definition the share of homes sold in an area that would have been “affordable” to a household earning the local income (considering mortgage rates) is at 62% presently. This was below 30% in 2005. This was at a similar 62% rate in second quarter 2015. Home prices have risen, but not too significantly since mid-2013; meanwhile, rents have risen much more significantly.”

Jim Belfiore, Zonda Advisory
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