“Demand for homes doesn’t look great beyond 2039 unless we open borders to immigration because birth rates are falling.”Īccording to the NAR, single-family home construction has lagged so dramatically that we’re now facing a 5.5 million home shortage. Millennials are driving the housing market, and even Gen X and baby boomers are looking for places to live-so that’s all healthy demand,” says Ralph McLaughlin, chief economist at Kukun, a real estate analytics company. “In the long run, the party won’t go on forever, but it will absolutely go on for the next five to 10 years. Housing experts are bullish about the current market because of what they call “solid fundamentals.” Creditworthy borrowers and strict mortgage qualifications coupled with a basic supply-and-demand imbalance have created a strong seller’s market that, according to some, could last at least 10 years. Most Economists Forecast a Continued Strong Sellers Market In other words, it’s just another day in a super-hot housing market. Home prices rose in 99% of the 183 markets NAR tracked in the third quarter, and 78% of them saw double-digit spikes in appreciation. But this double-digit price growth is still strong considering that annual home price growth over the long term averages around 3.5%. Talk to almost anyone in America about surging home prices, and you’ll come around to the trillion-dollar question: Are we in a housing bubble? Or, at the very least, when will these runaway prices abate?Īccording to the National Association of Realtors (NAR), the pace of home price appreciation slowed in the third quarter of 2021 compared to the previous quarter, rising 16% year-over-year (compared to 22.9% in the prior quarter).
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