Homes: U.K. went cold; U.S. could too

According to the Council of Mortgage Lenders, lending to "buy-to-let" investors dropped 18 percent between the first and second half of 2004 – compared with only a 3 percent drop for owner-occupied buyers. During that time, the number of such investors unable to meet their mortgage payments increased 50 percent.

"People were buying thinking they'd rent it out and make 15 or 20 percent appreciation, but now they're left with only the rental yield," said Stansfield at Capital Economics.

In the US the first time buyers are paying to much and giveing the sellers money to turnaround and buy a bigger house.

ALan Greenspan has made the cost of money cheap enough to banking institutios to make money from a carry trade. They get money cheap in the short term and lend it out for the long term. When the carry trade becomes unprofitable then the banking institutions wouls themselves be at risk. The blindness in this thing is the fakery in the value of the assets (the home values) that are on one side of the carry trade. The other fakey is that the money is too cheap for some folks to obtain. The federal reserve is clearly at fault in the bubble, but will leave it to something like a Resolution Trust Corporation to go clean up afterwards.

Inflationary expectations are just as disruptive in housing as for things that get included in the Consumer Price Index.