Housing Bubble?

HOUSING BUBBLE?….Is there a housing bubble? The latest “State of the Nation’s Housing” report from the Harvard Joint Center for Housing Studies says no. Nicolas Retsinas writes in the LA Times today that although housing prices have skyrocketed, they aren’t likely to go down anytime soon:

Three fundamental conditions have undergirded this sector, and they have not changed….First, demand remains high….Second, no-growth and slow-growth restrictions continue to constrain supply….Third, the consolidated financial services industry, with access to global capital markets, is flexible.

He does, however, suggest that higher interest rates will reduce the rate of refinancing, which in turn will result in lower consumer spending.

UPDATE: A rebuttal to the Harvard study is here.