Home Prices Year-Over-Year

Case Shiller Yer-Over-Year Percentage Change 2021-01

Let's step back a bit to see when and how these bubbles started.

Home Prices 2000-Present

Case Shiller Composite Indexes 2021-01B

Note the acceleration in home prices that started in 2000. 

It reflects then Fed Chair Alan Greenspan goosing the stock market over Y2K fears then accelerating the bubble with low interest rates fueling the housing bubble that collapsed on 2006.

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Fed Chairs Ben Bernanke, Janet Yellen, and now Jerome Powell all employed the same tactics to goose housing and the stock markets.

In Search of Inflation

Powell wants inflation. He cannot see what is right in front of his nose. But the Fed does not consider home prices as inflation.

For discussion, please see Easy Money Quote of the Day: Fed "Won't Take the Punch Bowl Away"

And as discussed previously, Inflation is Poised to Soar, 3% by June is "Almost Certain"

I will do a follow-up to this post calculating real interest rates which are behind the booms and the busts.

Mish

New Home Sales Decline 0.6%, Near Expectations, Prices Jump

New home prices are up, sales are soft but slowly rising over time. Sales are only 0.5% higher than a year ago.

Existing Home Sales Rise, Median Price is Up 14% From Year Ago

Existing home sales rose in January albeit from a big negative revision in December. Prices escalate.