Monster, you got that right! Our wages do not support the current prices, and the only reason they got this high is reckless financing. Stupid investors who bought MBS, backed by a home financed on 0% down, on stated income, with a negative amortization interest only loan. What kind of stupid investor bought this MBS? Anyway, that’s what caused it. And reckless FDIC which allowed the lending guidelines to be thrown out the window. Crooked executives at Fannie Mae, whose earnings have to be restated many years back, and nobody really knows what their earnings really are.

That’s why the Bubble Primer shows the median price/per capita income is at the highest ever since data going back to the 1970s: ratio is 14. If people could really afford these homes, the ratio would have remained at 7.