Cheap adjustable rate loans plus an insane derivates market brought the global economy crashing down nearly a decade ago, and now the housing market is reinflating, fueled in large part by more of those adjustable rate mortgages.
Those cheap loans triggered a massive housing price inflation, as loan officers signed off virtually all buyers, thanks to those robosigning machines [which are still very much in use].
U.S. home prices rose again in October as buyers bidding for scarce properties drove prices higher.
The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index, released Tuesday, rose 5.1% in October from a year earlier after climbing 5% in September. Prices for the 20 cities are still 7.1% below their July 2006 peak.
The broader Case-Shiller national home price index was up 5.6% in October and has fully recovered from the financial crisis.
Prices rose 10.7% annually in Seattle, 10.3% in Portland and 8.3% in Denver. New York registered the smallest year-over-year gain: 1.7%. Los Angeles prices rose 5.7%.
From the Federal Reserve Bank of St. Louis, a look at the course of the housing bubble through the end of July: