As 1980’s big-hair, New Jersey band Bon Jovi sang, US households are “Living on a Prayer.” Or The Federal Reserve-created massive asset bubble.
Quite a disparity.
Of course, The Federal Reserves zero-interest rate policy (ZIRP) and quantitative easing (QE) helped created massive asset bubbles that have helped households to historic high net worths.
Housing is one of the recipients of The Fed’s quantitative distortion (QD).
One indicator? Home prices are still growing almost twice as fast as average hourly earnings.
But YUGE bubbles. Hence, American households are living on a prayer that the massive bubbles don’t burst.
On a side note, I used to live in Rumson NJ and Jon Bon Jovi used to run by my house on the weekends (sans the big hair).