smart spending

10 years that shook America's finances

Year 2001Year 2002Year 2003Year 2004Year 2005Year 2006Year 2007Year 2008Year 2009Year 2010

Year 2006: Growing home prices create "bubble"

  • The year 2006 sees the peak of the housing bubble, with the median existing home price climbing to $221,900, more than four times the U.S. median household income at the time, according to the National Association of Realtors. The value of a typical American home climbs 50.4 percent since the beginning of the decade, with some markets such as Miami-Fort Lauderdale, Fla., Las Vegas-Paradise, Nev., and Riverside-San Bernadino, Calif., more than doubling.
  • Homeowners respond to the run-up in housing prices by drawing record amounts of equity out of their homes through cash-out refinancing, home equity loans and home equity lines of credit. All in all, Americans liquidate $318.3 billion in equity through cash-out refinances in 2006, according to Freddie Mac.
  • The rising federal funds rate contributes to rising yields on certificates of deposit, benefiting savers. In September, the average yield for a one-year CD hits 3.89 percent, a multiyear high that's a far cry from today's paltry average yield for one-year CDs of below 1 percent.
  • Alan Greenspan, the man largely credited with engineering the housing boom, retires on Jan. 31, ending a reign of more than 18 years as chairman of the Federal Reserve. He is replaced by Ben Bernanke.

-- Claes Bell

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MORTGAGE HOME EQUITY AUTO CDs CREDIT CARDS
Product Rate Change Last week
30 year fixed, 0 point 4.30%  0.13 4.43%
15 year fixed, 0 point 3.30%  0.03 3.27%
5/1 ARM 3.34%  0.12 3.46%
 
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30K FICO-based HELOC 4.38%  0.09 4.47%
50K FICO-based HELOC 4.11%  0.06 4.17%
100K FICO-based HELOC 3.96%  0.03 3.93%
 
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Product Rate Change Last week
60 month used car loan 2.63%  0.10 2.73%
48 month used car loan 2.90%  0.07 2.97%
60 month new car loan 3.17%  0.05 3.22%
 
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Product Rate Change Last week
1 Year CD 0.90%  0.01 0.91%
2 Year CD 1.09% --0.01 1.08%
5 Year CD 1.74% --0.00 1.74%
 
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Balance Transfer Cards 15.66%  0.01 15.67%
Cash Back Cards 16.36%  0.03 16.33%
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