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Is Another Housing Bubble Burst on the Way?

November 14, 2017

 

Home prices are on the rise and it's looking quite reminiscent of one of the most tumultuous times in the U.S. However, there are some differences that would prevent the near bubble-level numbers from contributing to another burst.

 

"In 2017, home price appreciation shows no signs of boom-era flipping or over-construction, but rather is being driven by tight supply and high demand, at a time when lending standards are much tighter and economic fundamentals more solid," according to National Mortgage News

 

The conditions of the last housing market crash were gravely different from what they are this time around. That fact alone lends protection to the theory that another crash could be in the works.
 

"As we compare today's market dynamics to those of a decade ago, it's important to remember rising prices didn't cause the housing crash," said Danielle Hale, chief economist for realtor.com, according to the NMN report.

 

"It was rising prices stoked by subprime and low-documentation mortgages, as well as people looking for short-term gains, versus today's truer market vitality, that created the environment for the crash."

 

So while the numbers are looking a bit similar, the conditions are much different. To learn more about home prices and the nearing of the bubble levels, click on the image above.

 

 

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