The Housing Bubble Is About To Burst

Business Week evaluates the the impact of rising mortgage rates on the housing bubble -- and arrives at dire conclusions.

1 minute read

July 14, 2004, 5:00 AM PDT

By Chris Steins @planetizen


"After an amazing four-year boom in residential real estate, the housing market could finally be topping out and heading for a downturn... It's always tricky to call the top of an overheated market, and the pessimists have been wrong before... But this time something important is different: Interest rates are inching up...

Today's housing prices are predicated on an impossible combination: the strong growth in income and asset values of a strong economy, plus the ultra-low rates of a weak economy. Either the economy's long-term prospects will get worse or rates will rise. In either scenario, housing will weaken."

Thanks to Chris Steins

Monday, July 12, 2004 in Business Week

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