By Ryan Perkins

With the U.S. economy still reeling from the COVID-19 pandemic and record unemployment， real estate prices continue to skyrocket， pricing thousands of house hunters out of the market in the U.S. and Canada. This may seem counterintuitive for an economy that is still recovering from recession， is yet to reach 2019 GDP levels and saw unemployment peak at just over 14 percent in April， 2020. The last time U.S. home prices raised this quickly， it led to an ensuing crash that brought down the global economy.

This asset bubble is not restricted to the U.S. but is crossing borders and going global， making housing or even renting unaffordable for many—especially those worst affected by the global pandemic. In fact the rate of price increases has alarmed policy makers in both the U.S. and Canada. “The dream of homeownership is out of reach for so many working people，” Senate Banking Chair Sherrod Brown told U.S. news outlet Politico recently. “Rising home prices and flat wages mean that many families， especially families of color， may never be able to afford their first home.”

According to World Population Review， the typical value of U.S. homes was$269，039 as of January， a 9.1-percent increase from January 2020. Between 1999 and 2021， the median price has more than doubled.

Canadian Prime Minister Justin Trudeau has also weighed into the topic recently in a statement saying that the cost of owning a home is too far out of reach for too many people in Canadas largest cities， noting it can take 280 months for an average family to save for a down payment in a place like Toronto or Vancouver.

Yet real estate is not the only asset class that is being inflated； both the NASDAQ and S&P 500 have increased by nearly 40 percent in the last 12 months despite unemployment near record highs in the U.S. The NASDAQ increased by 39.51 percent in the last 12 months while the S&P 500 rose 38.46 percent over the same period.

The source of the bubble

The source of this asset bubble inflation is the Federal Reserves（Fed） policy of quantitative easing（QE）—a term economists use to describe printing money and using it to buy back domestic treasury bonds from banks and other financial institutions. This， in theory， is designed to reduce the interest rate and encourage lenders to lend to industry or individuals to stimulate the real or productive economy.

In reality， much of this “free money，” as Michael Hudson， financial analyst and President of the Institute for the Study of Long-Term Economic Trends， contends， is instead used to speculate on assets both domestic and international—particularly in emerging markets where the biggest and quickest gains can be made. In essence， QE disproportionately benefits those closest to the Fed. These asset bubbles show no sign of abating as the U.S. is expected to approve an addition $2 trillion in stimulus this year and the Fed has said it wont take its foot off the pedal when it comes to pumping liquidity into the market.