Overheating Housing Market of US


people sitting on green grass field near city buildings during daytime

We are seeing the Overheating Housing Market of the US rapidly. And how long it will last remain a big question. Old trends are no longer there, and new ones dominate the market, thanks to pandemics and numerous other factors. Once financial colonoscopy of getting approval for a mortgage was the greatest worry of the buyers. But now it is no longer a worry. In virtually every American city right now, many single-family homes hitting the market are selling in bidding wars. And the buyer with the most cash who closes fastest wins.

The already overheating market

Numbers suggest America’s overheating housing market. Inventory in many parts of the country saw a record lows. Now we measure market days in hours. And home prices have soared 15.8% on average year-over-year across the country. Recent National Association of Realtors’ report validates this claim and shows it through numbers. Some places like Miami are seeing the “super boom”. In markets in Nashville, Sacramento, and Boise, contractual absurdities like waiving all contingencies are now standard conditions as panicked buyers over-reach to get in on the action before the current boom decelerates.

Pandemic is not the only reason and there are reasons beyond pandemic. “Home building since the end of the Great Recession hasn’t kept pace with population growth, while tens of millions of Millennials simultaneously have recently come of first home-buying age, creating a nationwide generational housing supply shortage that’s been deepening for years (which a ton of “experts”, policymakers, and lenders like Freddie Mac long saw coming).”, writes the Peter lane Taylor of Forbes.

On the demand side, a dozen years of bullish fiscal policy have just added more combustion to the fire. 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. 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.

The important and longer -term question here is that what is going to fix the current housing boom? But unlike 2008, it is a good news for everyone whether you currently own a home or not.

Also read about the benefits of the virtual home tours