In response to:

A Look at the Fed-Sponsored Housing Bubble

Steve54 Wrote: Feb 01, 2013 12:00 AM
Low interest rates contributed. But the prime cause of the bubble was government coercing banks to extend mortgages with almost no down payment to those who didn't qualify. We're speaking of people who generally wouldn't have got mortgages even at 0% for a 25 year term. Then there's Fannie and Freddie, serving this same social policy, buying up all these bad mortgages, freeing the banks to extend more of them. In turn these bad mortgages were dumped on Wall Street, which repackaged them as low risk securities Yes, the Fed could have jacked up rates to arrest this "irrational exuberance." But at what cost to all other industry? Social engineering government is the culprit. All else is distraction.

In the wake of rising housing prices a reader asked if I would revisit my March 2102 article How Far Have Home Prices "Really" Fallen.

The reader specifically wanted an update on inflation as measured by the HPI-CPI (a measure of the CPI where actual home prices instead of rent is the largest CPI component).

Here is some background on the request: The CPI does not track home prices per se, rather the CPI uses a concept called...

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