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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REFINANCE HOME EQUITY AUTO CDs CREDIT CARDS
Product Rate Change Last week
30 year fixed refi 3.85%  0.04 3.81%
15 year fixed refi 3.01%  0.02 2.99%
10 year fixed refi 3.14%  0.05 3.09%
 
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Product Rate Change Last week
30K FICO-based HELOC 4.75%  0.02 4.77%
50K FICO-based HELOC 4.04% --0.00 4.04%
100K FICO-based HELOC 3.85% --0.00 3.85%
 
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Product Rate Change Last week
60 month used car loan 2.92%  0.07 2.99%
48 month used car loan 2.79% --0.00 2.79%
60 month new car loan 3.04%  0.01 3.03%
 
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Product Rate Change Last week
1 Year CD 1.06%  0.03 1.03%
2 Year CD 1.18% --0.00 1.18%
5 Year CD 1.80% --0.01 1.81%
 
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Product Rate Change Last week
Balance Transfer Cards 15.90%  0.02 15.88%
Cash Back Cards 16.43% --0.00 16.43%
Low Interest Cards 11.16%  0.04 11.12%
 
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