The Echo Bubble in Housing Is About to Pop

And here's the knife in the heart of the Echo Housing bubble: declining household income. 

The Federal Reserve-induced Echo Housing Bubble is finally starting to roll over, and the bubble's pop won't be pretty. Why is the bubble finally popping now? 

All the factors that inflated the Echo Housing bubble are running dry. These include: 

-- unprecedented low mortgage rates 

-- FHA mortgage approvals for anyone who fogs a mirror 

-- frantic cash buying by Chinese millionaires desperate to get their money out of China 

-- the Federal Reserve buying up trillions of dollars in mortgages-- lemming-like buying of housing for rentals by everyone from Mom and Pop to huge hedge funds. 

The well's gone dry, folks. There isn't going to be another push higher or a third housing bubble after this one pops.

And here's the knife in the heart of the Echo Housing bubble: household income-- stagnating for decades for 90% of households--has declined since the Bubble Top when adjusted for inflation. 

Please explain how declining real income can support nosebleed home prices now that mortgage rates have bottomed and started their inevitable rise from absurdly low levels.

DYI Comments: FHA is pushing out 3% down mortgages making many of these new owners into nothing more than renters.  With so little amount of money in the property and many cases none at all as the down payment is borrowed when the going gets tough many will simply walk(default) on the property.

So far the U.S. economy is dancing on a head of a pin by not going back into recession. However, it appears that a global recession may be upon us in the near future, depending on the area, a decline of 10% to 25% for residential real estate is very possible.

DYI