One of the hottest topics for discussion right now and a question I literally get…
The media is chattering about a housing bubble, just like 2007. Is it real? Could it be true?
Here’s my take… and I am going to be recording a video on this as well…
Home sales are strong.
There are 14M more people today than in 2007.
Today we are 4.4M homes short of what is needed to satisfy current demand.
Supply is down. Demand is up.
Other differences – the lending standards are tighter; average equity in homes is higher; mortgage debt is lower percentage of income; more institutional cash buyers today; and more.
With limited inventory, and rising inflation and interest rates, it’s certainly a challenging market and uncertain times.
Higher home prices combined with higher rates will slow the pace of lofty double digit appreciation rates. But slowing appreciation does not equal housing bubble. Slowing appreciation also does not mean home prices will come down. Slowing appreciation means slower than before.
No one has a crystal ball. No one truly knows where this market is headed. But looking at the data, I anticipate seeing a softening in the housing market, but not a bubble. The softening will be due to some buyers being priced out of the market due to price and rate unfortunately.
Yes this is still a great time to buy a home. If you are waiting for a reset…you’ll likely be waiting a very long time and will instead see continued higher prices.