![]() What leads to a housing bubble?īubbles are a phenomenon that can happen in just about any industry, whether it’s homes, stocks, or gold. As a result, housing prices can fall drastically – and the bubble bursts. Suddenly, we’re in a situation where there are more homes for sale than prospective buyers. When this happens, demand begins to decrease and therefore, supply starts to rise. So at some point, the steep housing prices become unsustainable and homes become overvalued. This drives up demand further and prices continue to skyrocket.Īs we know from physics, what goes up must come down. Consumers expect prices to increase further, so everyone wants to buy a home as quickly as possible. As the prices start rising, speculation begins to take effect. Housing bubbles generally begin when there is a shortage of inventory and an increase in demand in a market. Also known as a real estate bubble, a housing bubble occurs when home prices rise at a rapid rate to a level of instability. So, is there a reason to worry? Are we in a housing bubble and headed for another housing market crash? Let’s take a look.īefore we jump into our current situation, let’s first take a look at what a housing bubble actually is. The soaring home prices and a lack of homes for sale may feel eerily similar to the 2007 housing bubble that led to The Great Recession. With the red-hot real estate market we’re experiencing, many consumers are understandably concerned. And this severe housing shortage is fueling record-high prices and cutthroat competition. ![]() However, there is a major problem – there aren’t nearly as many homes for sale as there are buyers. Today’s housing market is fierce! Due to remote work and record-low mortgage rates, Americans are relocating and purchasing homes at an all-time high.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |