6 Reasons To Fear Greed: Will There Be A Housing Market Crash?

Home prices in the United States have reached new highs and are rising, prompting some researchers and economists to warn that a bubble is forming and a housing market crash will soon follow.

According to some academics and economists at the Federal Reserve Bank of Dallas, home prices are rising faster than market forces suggest and are becoming unhinged from fundamentals.

Until recently, many did not accept there would be a housing bubble. However, after studying housing markets across the United States, the Fed experts concluded that fresh trends are developing.

Shifts in disposable income, the cost of credit and access to it, supply disruptions, and rising labor and raw construction materials costs are some of the economic reasons for sustained real house price gains.

Will There Be A Housing Market Crash?

1. Millennial Demand For Housing

The number of prospective homebuyers is abundant, with Millennials and younger Americans accounting for half of the population, or 166 million people.

According to data from the National Association of Realtors, first-time homebuyers account for the highest number of individuals buying homes (31%).



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2. Supply Cannot Keep Up With Demand

The low supply is also driving demand, and higher property prices are why the market will continue to be robust for many years.

The fundamental reason home prices have risen so quickly is the supply-demand imbalance. And after not constructing enough houses for the past decade, it will take at least several years for homebuilders to add enough new supply to bring the market back into equilibrium.

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