Monday, March 12, 2012

Hah! CNBC Thinks There Is a Rental Bubble

The CNBC headline blares: New Rent Report Suggests Possible Bubble

Not a chance.

Rents were up 3 percent nationally in January, year-over-year, according to a soon-to-be released new rental index from, reports CNBC. But, home prices were down 4.6 percent annually.

Says CNBC's Diana Olick says, it just raises a red flag to see home affordability at a record high, investors rushing in, and rents so strongly outpacing home values.

But, the fact of the matter is that all prices are starting to climb aggressively, from gasoline to food to rentals. They will continue to climb as long as the Fed continues to print aggressively. The housing market is a mess because of government intervention in the sector. If the government had stayed out of the sector the housing overhang would have cleared more than a year ago.

The way the housing/rental affordability index finally adjusts itself is not by rents falling, but by houses climbing in price.


  1. So if there is a rental bubble and it bursts, does that mean next there will be a camping tent bubble next?

  2. I guess the media is so ashamed that they missed the last bubble, they are paranoid now and seeing "bubbles" everywhere. Like a guy that gets mugged and is constantly looking over his shoulder watching for possible muggers.