If You Start Saving Now You Will Still Never Afford a Home

The year 2013 may go down as the peak of the post-recession boom. The S&P 500 stock index rose by 30%, its best year since before the first tech bubble burst. And hey, home prices did better than they have since before the housing bubble burst. The top... or just another stair, to heaven?

Disclaimer: Drawing any parallels to previous economic crashes based on nothing more than two data points that encompass most of our wealth would, of course, be specious and premature.

That said, the latest home price figures are out, and BUY! BUY! BORROW AND BORROW AND BUY BEFORE IT GOES UP MORE AND MORE, FOREVER! From the Wall Street Journal:

Home prices posted their largest annual gain last year since 2005, according to a report, amid a frenzy of sales activity, low mortgage rates, and reduced inventories during the first half of the year.

U.S. prices increased 11.3% in the fourth quarter compared to a year earlier, according to the S&P/Case-Shiller price index released Tuesday. An subindex that measures home prices in 20 major metro areas rose 13.4% over the same span.

The price index is back to where it was in 2004, when the mortgage business was really rolling. When you consider that, along with the hot-hot stock market and the fact that America's have-and-have-not economy still leaves a third of Americans unable to spend less than their income (and the fact that, even with the increase in home prices, the portion of Americans who say they're "building equity in their home or other property" has declined sharply in the past three years), does it all add up to a sign that we are simply reliving the past and priming ourselves for yet another economic bust caused by greed at the top that will end up harming those at the bottom the most?

Or is it more likely that, in fact, the entire economic space-time paradigm has begun running backwards, and we will soon be buying up tulip futures on margin and plunging our profits into the British East India Company's newest exploratory ventures?

Only a trained economist can say for sure.

[Photo: AP]