Global Cash Surplus Fuels U.S. Housing Bubble

In the past year, the red-hot housing market has not cooled off, as classical economic theory would anticipate. One big reason is that the global cash surplus has kept U.S. mortgage rates substantially lower than would have been the case if we were simply dealing with a domestic capital market. What does this say for the opportunities and risks that lie ahead? We'll explain.

As we’ve forecasted previously in Trends, the prices of higher-end homes, which cost $1 million and up, have softened in rece.....