The consensus from analysts is that while there may be some signs of a bubble, rather than crashing, the housing market will likely cool over the coming months. The National Association of Realtors predicts a 3% increase in property prices in the coming year.
According to Yun, this year's home price-to-income ratios have been the worst since 2006. He points out, “the situation is very different now.” There are several reasons why real estate investors don't need to fear a housing market crash.
Home building slowed down significantly after the last recession and has never fully recovered to pre-2007 levels. Builders can no longer buy land and rapidly secure regulatory permissions to satisfy demand.
Near-Historic Low Mortgage Rates Are Still In Place
Mortgage rates have climbed somewhat since hitting all-time lows in January, but not by much. According to a survey of lenders conducted by Bankrate, the average 30-year loan rate was recently 3.22%. Low-interest rates give homebuyers more sway in the market.