Housing

For the first time since 2007 the Fed's Exuberance Index is warning that U.S. real estate prices are in a bubble. Did the Fed even notice? 

The U.S. Federal Reserve's latest Exuberance Index (Q2), considered a “smoking gun” for bubbles, shows Canada is well into a real estate bubble - a bubble on a bubble.

Moody’s Analytics' latest Canadian real estate model shows markets are overvalued by up to 91% across the country. As disastrous as that sounds, the firm isn’t expecting a big housing crash [but] the baseline model shows low to no price growth, as mortgage rates rise. 

Global home prices are rising, but not to the same extent everywhere. Canada and Germany’s home prices made much sharper gains than other G7 countries

According to the latest UBS annual Global Real Estate Bubble Index released today, Toronto home prices now rank as the second biggest bubble in the world and, while Vancouver was a few spots lower, it still beat out notorious markets like San Francisco and Singapore. 

Saying Canadian home prices are frothy, is like saying Mozart had a little musical talent. Residential real estate prices in Canada are growing at the fastest rates in the G7 and not just over the past year, but over the past 3 decades, Nothing in the G7 comes even close to this rate of price growth.

According to the National Case-Shiller Home Price Index, house prices have spiked 19.7% on average in the U.S. from a year ago, the biggest year-over-year increase in the data going back to 1987. The national index of this raging mania doesn’t do justice, however, to certain individual metropolitan areas where price spikes reached up to 32%. Here are the details of those metropolitan areas.

The whole world might be in a property bubble, but Canada is the second riskiest (only beaten by the Netherlands) according to Oxford Economics which believes a correction is likely to take place and the longer it’s put off, the worse it will be.

“Home ownership” is regarded as some sort of Holy Grail of financial planning based upon the conventional belief that owning real estate is the #1 path to (at least) financial security, if not affluence, but there is no substance to this belief. Here's why.

Bloomberg Economics says the run-up in global real estate prices over the last year has produced a warning signal unlike any other, not seen since right before the 2008 financial crisis.