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  1. bewildering
    July 18, 2014 @ 12:29 PM

    What is considered a balanced
    What is considered a balanced inventory? The value seems to jump around all over the place. 3 months seems low, but I haven’t seen any values prior to 2007.

    • Rich Toscano
      July 18, 2014 @ 12:34 PM

      Bewildering, when I first did
      Bewildering, when I first did the original chart, 6 months was about the level that tended to mark the threshold between rising and falling prices. Interestingly, this is spot on with the “6 months of inventory is a balanced market” rule of thumb I’ve occasionally thrown around.

      They didn’t even break out contingent inventory until more recently, so it’s tougher to know what is balanced if we are looking at active only. The huge presence of contingent inventory, and its subsequent disappearance, have both distorted things so that it’s harder to tell what’s going on…

  2. werdna
    July 19, 2014 @ 12:15 PM

    UT San Diego recently had and
    UT San Diego recently had and article on the return of 0-down loans:

    Sounds like 0-down loans are limited to a few credit unions, but are lending standards going down again more generally? Could that contribute to the increasing prices? Or would you expect increasing number of sales if that were that case?

    • spdrun
      July 19, 2014 @ 3:32 PM

      This article says that 0%
      This article says that 0% down was brought back in 2010 by NFCU. With QM coming into force this past January, there’s next to no secondary market for 0% down loans. I seriously doubt that this is a big factor, especially since sales aren’t rising like during the last bubble.

      • EconProf
        July 20, 2014 @ 4:32 PM

        I’d suggest interest rates
        I’d suggest interest rates are a big factor here. The 10-year bond interest rate is down 1/2 % so far this year, and mortgage rates track this instrument pretty closely. Plus, credit standards are reportedly being relaxed of late for home buyers.
        The interest rate decline is surprising everyone, since the forecasts at the end of last year were for higher rates. Blame that on weak GNP growth (actually minus 2.9% rate in the first quarter) so far this year. With economists rapidly lowering their growth forecasts, low mortgage rates may be with us for some time.

      • bewildering
        July 21, 2014 @ 1:57 PM

        US bond yields are high
        US bond yields are high compared to international bond yields. Irish 10-year bond yields are now 2.23 – US are 2.45. Weird considering Irish yields were above 10 a few years ago…

        Japan and Swiss 10-year yields are 0.6. Is this the future for the US 10-year bond yield?

        I can’t imagine US yields going higher in this international market. So mortgage rates might be heading even lower.

      • spdrun
        July 22, 2014 @ 9:56 PM

        Prices have been all over the
        Prices have been all over the map in the past five years, even with low mortgage rates. You’re ascribing some sort of rationality to the market. Perhaps geopolitics will be good for a scare.

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