![]() ![]() Economic uncertainty meant fewer people were willing to make significant financial changes. These are lifestyle trends that are unlikely to change in the future.Īdditionally, the pandemic further decreased the supply of homes as potential sellers decided to wait to list and move. Meanwhile, older Americans are living longer and staying in their houses, rather than moving in with their children or seeking out assisted living. More young people are buying (or trying to buy) their first homes. Planet Money, a podcast by NPR, recently created an episode to explain this housing shortage. False confidence in the market isn’t driving up the cost of homes, the housing shortage is. In 2021, there were only 1,130,000 groundbreakings per month on average with only 1.25 existing homes on the market. In 2006, there were 1,823,000 single-family home groundbreakings per month and there were 4.04 million existing homes for resale on the market. The supply of housing is still low, even with new construction starting each month. Is the current housing bubble about to burst?ĭespite the continued rise in demand for housing, experts don’t believe America is heading for another housing bust. This leaves people asking – are we in a housing bubble and is it about to burst? By 2016, that number dropped to 62.9 percent.Įven though the Recession was only a decade ago, economists are already speculating about the next housing bubble burst. According to the Washington Post, homeownership rates peaked at 69.2 percent in 2004. The housing bubble contributed to the Great Recession of 2008, a period that some people are just now recovering from. They encouraged buyers to select balloon mortgages, where payments start small and then balloon up in the future. Predatory lending practices meant banks and private finances were approving people for mortgages with poor credit and high debt-to-income ratios.
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