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Baseline Scenario
I love correlations via CalculatedRisk Housing Starts and the Unemployment Rate (image)
I completed missed the news that all money printing by Bank of England already managed to fuel asset price inflation in … housing! Due to lower inventory of unsold homes than elsewhere (USA, Spain), London house prices already surged past 2007 record high.
In a separate index, home prices depreciated at a 18.2 percent pace in the fourth quarter from a year earlier, for the largest drop since the series began 21 years ago, it said. From the housing market peak in the second quarter of 2006, home prices have plummeted 26.7 percent, it said.
… and they are still above 2004 levels. Whereas stocks are at 1997 levels. If, hypothetically, house prices were to go back to 1997 levels as well, that would mean another 50% decline.
