BiggerNews May: What the Media Isn’t Telling You About a “Housing Crash”
Following two years of record-high price increases, housing is one asset that many see potentially crashing in the months ahead. We’re already seeing what appears to be a peak in year-over-year data from pricing to mortgage applications.
And with mortgage rate stating to rise, some see housing as a bubble that’s now about to burst. Following 122 consecutive months of home prices appreciating relative to the prior year, such a selloff looks likely.
However, notes Rick Shargra on the BiggerPockets podcast, there’s no indicator that we’re in a full market bubble.
Some housing markets may be prone to a correction following the big runup in the past few years. But other markets are still seeing strong demand in excess of housing supply.
Overall, that points to a housing market that is softening. But given the recent price rises, we could see a plateau in home prices for some time to adjust to the big recent changes, rather than a full-blow drop in housing prices nationwide.
Thanks to rising prices and now rising interest rates, the payment cost for the average home has no risen around 27 percent over the past year.
But even with that rapid increase, it appears that it’s leading to fewer bids on homes and more time on the market as opposed to lower prices.
In other words, the overall housing market doesn’t appear to be in a bubble. But it is overdue for a slowdown.