Housing Predictions: Guesses and the Data

If inventory stays low, then house prices will continue to rise fairly quickly (although it appears house price growth is slowing). Double digit house price increases aren’t sustainable, so the question I’m asking now is: What will cause inventories to increase?

I’m considering three possibilities: 1) mortgage rates rise fairly quickly, slowing demand, 2) economic problems in China spillover into the US, and 3) unregulated areas of finance cause economic problems.
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This is something I mentioned on my blog in 2013:

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The most likely cause of higher home inventories will be higher mortgage rates, but unregulated areas of finance are always a concern and something I’ll be watching.