Blogatative Easing: Ben Bernanke, Brookings blogger

Blogatative Easing: Ben Bernanke, Brookings blogger

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The Ticker

Homeowners motivated by rising prices

As bubble fears grow, buyers will either jump in or hold back

big house

Analysts toss around the word bubble like it's free money. But what does the term actually mean? While there is no clear answer, the classic 2004 housing bubble paper composed by Karl Case and Robert Schiller describes their version of a bubble:

Per CNBC:

We believe that in its widespread use the term refers to a situation in which excessive public expectations of future price increases cause prices to be temporarily elevated. First-time homebuyers may also worry during a housing bubble that if they do not buy now, they will not be able to afford a home later.

Following this definition, the article suggests we are not far from a bubble.

People buying homes are citing future price increases as one of the "key factors" motivating them to buy. The most recent survey by the real-estate company Redfin found that almost one third of buyers are motivated by rising prices.

Source: CNBC
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