Housing Bubble?

Today MSNBC has a good article about the changes in home size and quality over the past 25 years.

I firmly believe that housing prices will drop in line with any rise in interest rates due to the fact that so many people buy based on the monthly payment they can afford. However, I also think it is important to note that prices have also increased because people are buying bigger, nicer homes.

It is also true that the increase in average housing prices does not lead to a uniform increase in prices. Many American home owners have not seen the price increases that the average numbers would lead you to believe. The increase in size and quality of new homes is a key factor in the growth of housing prices.

Chart courtesy of MSNBC

Timothy Burger