Curious why in yesterday's FOMC minutes [4]the following line "a few participants expressed concern that conditions in certain U.S. financial markets were becoming too buoyant" received special attention? Here is the reason: as the chart below shows, according to the census bureau [5], the average new home sale price just hit a new all time high, rising by a record 15.4% to a record $330,800. In a country in which real disposable consumer income [6]is flat at best and in reality declining, it only makes sense that the average new home price just hit a level not seen since the prior credit-bubble fueled housing peak.
Average new home sale price:
[7]
And the sequential change in the average new home sale price:
[8]
Obviously both of the above charts are justified by the average real disposable income per capita in the US:
[6]
Or maybe not...