Betting On the House

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Is the stock market finally showing signs of rally? Who cares? It turns out that the real money is to be made in shelter; in July, the real estate market continued its unabated ascent as sales of existing homes rose 4.5 percent, according to the National Association of Realtors — slightly better than the pace set a year earlier. And the Commerce Department said that sales of new homes jumped by 6.7 percent.

The gains can be attributed to ultra-low mortgage rates — thank you Mr. Greenspan. The average homebuyer can easily sew up a 30 year fixed mortgage for as low as 6.5 percent. Even those who fear that the recession has only gone into remission might be lured by those rates.

Still, the new numbers are bound to re-energize the housing bubble debate. Is this real estate market soaring on an Icarus trajectory too close to the sun? Probably not. Read why in "What Housing Bubble?" by Daniel Kadlec: More > > >