Call off the bubble alert. Through 2012 and 2013, U.S. house prices were rising at a pace that was as extreme as anything seen during the disastrous housing bubble of the last decade. But since the start of 2014, the pace of increase has slowed markedly. Assuming the slower pace sticks—and it looks as if it will—prices will remain affordable, if not exactly cheap. “That means that the housing market will avoid becoming overvalued, allowing the recovery in sales activity and housing starts to continue,” Capital Economics property analyst Paul Diggle said in a research note today.
