Fed Notes Extreme Exuberance in U.S. Housing
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I may disregard some of the fundamental analysis the Federal Reserve uses, but the first of three indicators they are using to declare a housing bubble caught my attention. Please note that this does not mean that housing is being declared at a pricing top today. It cautions that a bubble is building to a point that a "pop" is the likely scenario that will resolve the current situation:
"Exuberance indicator"
Economists looked at a statistical model that tracks "exuberance," or when prices increase at an exponential rate that can't be justified by economic fundamentals. When their exuberance measure reaches a 95% threshold, that signals 95% confidence that the market is experiencing "abnormal explosive behavior," they noted.
The current exuberance measure: 115%.
Excerpt from Federal Reserve issues warning over "brewing U.S. housing bubble"
