The Real Estate Market is Not in a Bubble....

The Real Estate Market is Not in a Bubble....

Gaining ground like never before, the U.S. housing market is currently experiencing double digit annual growth in prices, bidding, and buyer demands. However, the high-flying housing market is the source of many new worries regarding housing “bubbles.” Luckily, economists are shooting down these fears of overinflation.

Vishwanath Tirupattur, a Morgan Stanley strategist, wrote to his clients: “We have strong conviction that we are not experiencing a bubble in U.S. housing.” The chief economist of the National Association of Realtors also agreed, stating that this was just a “lack of supply” rather than a bubble.

Regardless of the speedy rise in prices, tight credit, low housing inventory, and trustworthy vendors make it safer than ever to purchase a house. Product risk comprised around 40% of the mortgage market in 2006, but is now at an all time low at a mere 2%.

The housing market is also four times smaller than it was in 2007, seeing a fall from 4 million homes to just 1 million. Still, economists say that housing prices aren't expected to fall anytime soon, but they won't be rising as rapidly as we've seen in the past few months. Home prices are going to continue to rise, but this time more gradually than before.


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Francesca Facchini
Francesca Facchini
RE/MAX Suburban