How Much Is the Fed Driving Home Prices?


Source: Iacono Research

 

Some people look at me funny when I say that Real Estate is one of the few bright spots in the economy, but that its mostly inorganic.

Tim Iacono, who does a masterful job explaining how extraordinary these Fed driven mortgage rates are. The 40 year average is 8.7%, the 20 year average is 6.5%, and current 30 year rates are 3.3%.

The chart above is from a post of his — the change just over the past year or so is a ~15% increase in buying power for mortgage users from $240k to $280k on the same $1100 per month.

 

Source:
How Fed Policy Distorts Home Prices
Tim
Iacono Research 12/05/2012   http://iaconoresearch.com/2012/12/05/how-fed-policy-distorts-home-prices/

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