Our would-be homebuyers make enough money to outbid each other on the limited number of homes available for purchase. This is a big reason why recently on Bloomberg, I talked about how this is the most unhealthy housing market in a long time.
For me, it’s always about real home-price growth, and this price index, as you can see, has gone parabolic now. Today the Case-Shiller index showed 12% home-price growth. This was my main concern in the years 2020-2024, and that is being played out currently. All those factors are in play, and home prices are growing too fast.
ARE WE IN A HOUSING BUBBLE 2021 PATCH
When you have the best housing demographic patch ever in history and the lowest mortgage rates in history, with housing tenure at 10 years, then we have to start worrying about home-price growth. Since 1996, it’s been very rare to have existing home sales fall below 4 million in a month. Because of this, if we have the demographics for home buying, then we will have stable replacement demand. The only factor that changes this in a big way is if mortgage rates get too high. Housing is a necessity - it’s not optional. Inventory levels stayed stable, housing demand picked up after five weeks and mortgage rates went lower. Once COVID hit in earnest, many predicted that housing would crash.ĭemand did take a pause - but that was brief. economy was plugging along nicely before COVID-19, and the housing market was doing even better. The month before COVID-19 became a known entity in our country, demand for housing started to break out. The America is Back Economic Model and the 10-year yield should share the Oscar for best performance.įavorable demographics have been a significant contributor to our rapid economic rebound, especially in the housing market. Today we are enjoying the most remarkable comeback of the U.S. economy would be OK despite the dark period we were in. Last year, during the throes of COVID-19, I expended many words arguing that the U.S.
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