Mortgage bonds stoke bubble fears

An increase in the demand for sub-prime mortgage bonds in the US is stoking fears the property market is becoming overheated. Returns on subprime-backed debt are up 12.7 per cent this year after rising more than 41 percent in 2012, according to Barclays. US house prices have shot up 10.9 per cent in the country’s 20 largest cities over the last year, according to the S&P/Case Shiller index.