Here is an updated version of Case-Shiller’s housing index for the country. (The source for the updating and the image is The Big Picture and TBP reader Steve Barry.) It is of course somewhat misleading because there is not a national housing market. But it does capture factors that affect all housing markets.
Some people explain the recent 15 years as being caused by “animal spirits” arguing that if you think prices of an asset will go up, then that belief can be sufficient to cause a bubble. True, no doubt. But what causes that belief to take hold. Some people say it’s just random. A fad. The madness of crowds. Could be. I suspect that the systematic attempt by federal government policy that began in earnest in 1995 and ran through the Clinton and Bush II administrations had a lot to do with it.