With the recent events of 2007-2009 still lingering on investors’ minds and nominal housing prices now exceeding their peaks from 2006, the housing market is an obvious place to look for signs of overheating. It has been unusual for economic expansions to last more than a few years after the economy reaches full employment, which it now has, and the country should remain on the lookout for early signs of imbalances whose reversal eventually could trigger the next recession.
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