It's Deja Vu all over again

Robert Reich

Here's something I'm becoming concerned about (and you should, too): Home prices are now rising much faster than income (see chart below). In the 1990s, home prices rose at about the same pace as the median income. But in the early 2000s, home prices began to rise much faster than incomes. That trend isn't sustainable -- and it wasn't. Remember the housing bust? After housing prices crashed, home prices were once again aligned with median incomes. But now they're diverging again.

I worry on two counts: (1) this is setting us up for another housing bust, and (2) it means housing is inaccessible to even larger numbers of Americans.

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