“Over the past year, the Federal Reserve has ramped up its policy of quantitative easing, with the result being new stock market highs and surging bond prices. Moreover, housing prices jumped 8%, the biggest annual gain since 2006. The result is that more than a trillion dollars have been added to the market value of single-family homes. Homeowners are now wealthier and according to what economists call the ‘wealth effect,’ they should be willing to spend more, helping the economy.  But recent data released by FHFA suggest that the increase in house prices is not being driven by a broad-based improvement in the economy’s fundamentals.”

http://online.wsj.com/article/SB10001424127887323646604578400252745095518.html

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