Nicky's News, Real Estate Bubble or No Bubble?

Bubble or No Bubble?

What History Tells Us About the Likelihood of a Housing Crash This Year

As home values continue to rise at a double-digit pace, confidence in the housing market is eroding.

Only 30% of respondents in Gallup’s annual Economy and Personal Finance Poll said it was a good time to buy a house, a whopping 23 percentage point drop from last year. What’s more, in a recent survey by real estate brokerage Clever Real Estate, 45% of likely home sellers said they believe there is a housing bubble that might pop this year.

Concerns over a housing bubble have been brewing for months. In March, the Federal Reserve Bank of Dallas reported an increasing concern over the possibility of a bubble as home prices continued to increase at a fast pace.

The fear of a new bubble is understandable. Most people remember the devastating effect the last housing collapse, including more than 6 million households that lost homes to foreclosure.

However, those worried about a 2008-style housing bubble may be better served looking further back in time for how today’s market may play out. Read More

-Thinking of Selling, it's not too late-

2 signs the US

isn't in a housing bubble

Alcynna Lloyd

Economy reporter

Home prices have reached record highs — and as affordability plummets, it's no surprise that homebuyers and experts are debating the possibility of another housing crash.

"The housing market is showing signs of froth, no doubt, "Ali Wolf, the chief economist for Zonda, a homebuilding prop tech company, previously told Insider. "Because of that, a lot of people have started to draw comparisons to the mid-2000s housing boom."

"Froth," "crash," and a bursting "bubble" are all real estate speak related to a worst-case scenario if the currently hot housing market were to cool so much that homebuyers were unable to sell their homes for more than they paid.

Earlier this month, the Federal Reserve Bank of Dallas published a report suggesting that US house prices are once again becoming unhinged from what buyers can afford as they rush into purchasing due to the fear of missing out rather than the strength of their long term financial health. Read More