U.S. Housing Price Boom-Busts in Historical Perspective
Networks Financial Institute Policy Brief No. 2005-PB-02
19 Pages Posted: 12 Aug 2006
Date Written: October 2005
There is present concern that housing prices in the U.S. are undergoing an unsustainable boom, which some refer to as a bubble, that will end in a bust with dire consequences for the real economy. This paper considers whether this dire scenario is likely to happen. My reading of the literature on the housing boom and study of U.S. economic history makes me skeptical. The U.S. has had a long history of housing booms which were regional or local. It never experienced a national boom-bust and this episode will likely repeat the experience of the past.
Keywords: housing prices, boom, bust, bubble, cycle
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