Is the housing bust coming to an end?!

After six long years (2006-2011), the U.S. housing market finally appears to have bottomed out. Interestingly, six years is the international, historical average duration of the housing bust which inevitably follows a mortgage credit and house price bubble, as calculated by Carmen Reinhart and Kenneth Rogoff in their book, This Time is Different (2009).

As shown in the chart, the average U.S. house prices, after falling about 34%, are moving generally sideways, and are slightly above their level of a year ago. As also shown on the chart, they have fallen below their trend line, and have returned to the levels of 2003. One 2012 survey found house prices rising in about 40% of the 384 U.S. metropolitan areas it covered and observed that “It is now cheaper to buy than to rent in many U.S. markets.”      Source: Case-Shiller