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The housing recovery delivered two more strong headline numbers this morning.

First came the S&P Case-Schiller Home Price Index which rose 12.1% since April of last year, its biggest year-over-year increase since the height of the last housing bubble in March 2006.

Then, New Home Sales surprised with an annual rate of 476,000 in May. The consensus called for 460k. Plus upward revisions in the prior two months totaling 19,000 added to the strength.

This is clearly solid news for homeowners and the economy. And hopefully we will see the positive effects of this data keep showing up in the labor market.

But there may start to be some concern about speculation driving prices up too fast, with private equity players like Blackstone buying up single family homes and forcing other "flippers" to act faster.

Tracey talks about the "bidding wars" for houses and condos she hears of all the time from realtor friends. And I received an email the other day from a subscriber that sums up what I hear Tracey talk about all the time...

My wife and I are real estate investors.  We buy properties a little outside of Los Angeles. Most decent residential properties that come out in the market sell within 1 week. Some of them have dozen offers, selling 5-10K above asking on a $300K home. Some areas have gone up by 40% in 12 mo.

There is no housing recovery here -- it's a feeding frenzy.

Most buyers we go up against are cash buyers. Rates going up will not affect them. Besides, for those that need to borrow, rates going up will not slow down home sales either. If the rates go up a little bit, most buyers' mentality will be "Oh my God, I better buy before it goes up more!" I don't foresee home sales slowing down till 30 year mortgages hit at least 6%.

Is this just a rare anecdote, or are we building another bubble? Let's hear your analysis of the data and your personal experience with the housing market.

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