My bottom line is that monetary policy should react to rising prices for houses or other assets only insofar as they affect the central bank's goal variables - output, employment, and inflation.

Long-term unemployment can make any worker progressively less employable, even after the economy strengthens.

The distribution of wealth is even more unequal than that of income. ...The wealthiest 5% of American households held 54% of all wealth reported in the 1989 survey. Their share rose to 61% in 2010 and reached 63% in 2013. By contrast, the rest of those in the top half of the wealth distribution —families that in 2013 had a net worth between $81,000 and $1.9 million —held 43% of wealth in 1989 and only 36% in 2013.

After adjusting for inflation, the average income of the top 5% of households grew by 38% from 1989 to 2013. …By comparison, the average real income of the other 95% of households grew less than 10%.

Individuals out of work for an extended period can become less employable as they lose the specific skills acquired in their previous jobs and also lose the habits needed to hold down any job.

The past few decades of widening inequality can be summed up as significant income and wealth gains for those at the very top and stagnant living standards for the majority.

The bottom line for housing is that the concerns we used to hear about the possibility of a devastating collapse—one that might be big enough to cause a recession in the U.S. economy—while not fully allayed have diminished. Moreover, while the future for housing activity remains uncertain, I think there is a reasonable chance that housing is in the process of stabilizing, which would mean that it would put a considerably smaller drag on the economy going forward.