Journal Article

Bubble, bubble, toil, and trouble


Abstract: The rapid rise of real estate prices in recent years has led to fears of a housing price bubble. But, to determine whether there has been a bubble?and whether the bubble is bursting?one needs to know what home prices ?should? be. The authors estimate a simple model of home prices and find that prices were, on average, above their predicted levels during 2000?06. However, this result does not hold true uniformly across the country. To the extent that prices were overheating, this was happening largely in markets that have traditionally exhibited volatile prices

Keywords: Housing - Prices; Mortgage loans;

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Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Economic Perspectives

Publication Date: 2007

Volume: 31

Issue: Q I

Pages: 16-35