There Ain’t No Housing Bubble Yet

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The Street has published an article about the five most undervalued housing markets that are “great bargains” for the person looking for a long-term living plan. Detroit is deemed the “second-most-undervalued market” in the U.S. According to Crain’s Detroit and the Detroit Free Press, the Detroit metro housing market is witnessing a slim inventory and rising values – an 18.5% rise year-over-year. Yet this market is still considered to be a bargain.

“There’s not a lot (of houses) to go around,” said Kandace Carter, a Realtor with Century 21 Row in Livonia. “It means that every house that you’re going to make an offer on, you’re going to be one of 10 or 20 or 55. Several months back, you could have been the only one.”

Today, Richard Fisher of the Dallas Fed was quoted as saying“We have a booming housing market. I don’t think it’s a bubble yet, but it has corrected enormously, so my personal view would be to slow the rate of acceleration.”  In fact, three federalistas recently called for a halt of the Fed’s purchase of mortgage-backed securities.

Dallas Federal Reserve Bank President Richard Fisher said today buying mortgage bonds risks disrupting the market, while Philadelphia Fed President Charles Plosser said, “it’s not good for the bank to be holding lots of mortgage paper.” Jeffrey Lacker of Richmond said to reporters yesterday the Fed should “get out of the credit allocation business.”

Yet it was only a month ago that the Fed announced its intentions to keep up the purchase of mortgage-backed securities in order to prop up the job market and “contain” inflation. The Wall Street Journal just reported that the Banksters are not only cheering on the “renewed interest” in the purchase of mortgage-backed securities, but they are also hopeful for yet another securitization fiasco.

9:16 pm on June 7, 2013