While the economy as a whole is soaring, with GDP growth averaging 4.8 percent in the last two quarters, the housing market is struggling a bit.
Just Tuesday came news that the S&P/Case-Shiller index of home prices in 20 major cities rose 4.5 percent in the 12 months through October, the smallest gain in two years, after advancing 4.8 percent in the year ended in September.
New home sales fell 1.6 percent in November, and existing home sales dropped 6.1 percent.
"Home prices have been playing catch-up in the wake of the housing bust. But over the very long term, prices tend not to appreciate more rapidly than inflation," writes
John Carney of The Wall Street Journal.
That's not a good sign for rising home prices, given that most economists expect inflation to remain below 2 percent next year. Consumer prices climbed 1.4 percent in the 12 months through November.
Still, Wells Fargo, the biggest home lender, predicts a 3 percent increase in home prices next year.
"That looks too optimistic," Carney says. "Housing may end up being the odd man out in 2015 amid a strengthening U.S. economy."
Many economists see the housing market losing its boom-bust flavor.
"As you look forward, we're considering a housing market that should be a more normal housing market, which means driven by the pace of income and other aspects of affordability," Michelle Meyer, a senior economist at Bank of America, tells
Bloomberg.
"Price appreciation should slow to fall more in line with the growth in income." Personal income rose 2.9 percent in the 12 months through November.
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