re: Home Prices Show Biggest Rise in 6 Years

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I thought the problem with the housing market was that the average consumer was paying more than what they could afford. Home values increased more than median salaries.

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I don't think that really gets to the heart of what the problem was.

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If home prices go right back up to where they were, then have we really fixed the problem. Are we not just reverting back to the bubble?

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Well I seriously doubt that they are going to reach December 2005 levels in terms of real prices any time within the next decade.

Nonetheless, I am in a very general sense sympathetic to your viewpoint here, and as I said in that ZIRP thread I created a couple of months ago, I think Bernanke has been making a huge mistake with monetary policy ever since the beginning of 2011, similar to what Greenspan did (with Bernanke's voting support) in 2003.

So is another housing bubble being created? No, I very much doubt that. At the same time, however, I do think that monetary policy is generally causing artificially high asset prices, and that includes housing. The U.S. appears to be running into what I previously thought would never happen--Japanese-variety ZIRP-style problems where artificially high asset prices, low growth, and low inflation become an entrenched phenomenon that acts sort of like a macroeconomic tar baby. It really is a terrible thing to behold.