In many large cities, home prices have outpaced income at an incredible rate. In Miami, for example, incomes have risen 16 percent, while home prices have increased 58 percent since early 1998. Boston home prices have gone up 89 percent, while incomes have increased only 22 percent.
Even with a downturn in the real estate market looming on the horizon, home sales are still headed for another record year.
The first sector to show slowing is the high-end home market. Because of big-ticket properties, house auctions nationwide have surged.
Low interest rates are the only continuing positive trend of the housing market. Low rates average now less than 6 percent for 30-year fixed-rate loans, the lowest since the 1960s.