Chart of the week: a bubble in the US property market?

American house prices have regained their credit bubble highs, according to the Case-Shiller index of national prices. Prices are rising at an annual rate of 5.9%, the fastest in almost three years; this figure peaked at 16% in 2004.

This upswing looks more sustainable than the 2000s frenzy. The interest-rate hikes from the US Federal Reserve haven't yet had much upward impact on mortgage rates, while supplies still look relatively tight, says S&P's David Blitzer. The inventory of houses on the market is worth 3.7 months of sales; the long-term average is six.

Viewpoint

"History suggests almost no meaningful correlation between domestic political outcomes and investment performance. Over 35 years, there have been four parliaments in which the government had a majority of more than 100. The performance of the UK stockmarket during those periods ranged from a positive 153% gain (between 1983 and 1987 under Margaret Thatcher) to a negative 16% fall in Tony Blair's 2001-2005 term. The biggest majority of all [1997] resulted in an unexciting four-year return of 33.7% The election will be entertaining for political junkies [but] for investors ... the news will be big but unimportant."

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Fidelity's Tom Stevenson,The Daily Telegraph