#ARE WE IN A HOUSING BUBBLE 2021 DRIVER#
“A real estate bubble occurs when home prices escalate beyond what can explained by the fundamentals, like mortgage rates, population growth, or household income growth,” explains Taylor Marr, Lead Economist for real estate website Redfin, “When expectations of price increases become the driver of price increases themselves instead of fundamentals that creates its own feedback loop. If the current real estate market contracts or collapses what does that mean for the fragile. Then, there are other externalizing factors that don’t get the headlines but are also moving the needle, like technology-including online listing platforms, digital mortgage approvals, and virtual closings-which has fast-forwarded the speed at which homes are marketed and sold, particularly during the recent pandemic, in turn artificially hastening the pace at which demand is outstripping supply. This has created a “shadow inventory” of millions of homes that never hit the market because it makes more financial sense for owners to hold than sell as long as prices continue to outpace carrying costs (which in most market cases they still do). According to the Mortgage Bankers’ Association, 2.5 million mortgages, or 4.96% of all outstanding residential loans, also are still in forbearance, as wealthy buyers continue to snatch up second and third homes (or more) as investments. Mortgage interest rates have stayed at record lows through three successive Presidential Administrations, as the Dow Jones, NASDAQ, and S&P 500 have nearly tripled during the same period. On the demand side, a dozen years of bullish fiscal policy have just added more combustion to the fire.
0 kommentar(er)
