The Second Housing Bubble

Since the second U.S. housing bubble began to inflate in July 2012, the median sale price of new homes has increased on average by about $23 for every $1 increase in median household income. This represents a faster average pace of growth than was recorded during the inflation phase of the first U.S. housing bubble. As with the first U.S. housing bubble, which sparked off its inflation phase back in November 2001, the proximate cause of the second U.S. housing bubble is nearly identical: a sudden and very large influx of money flowing into the U.S. housing from the sale of investments in other markets.