3 Reasons Why We’re Not in a Housing Bubble - High Performance Real Estate Advisors

Here are three reasons why I believe our housing market is not in a bubble.

So many people have been asking me lately if we’re in a housing bubble. My answer is that we’re not, and here are three reasons why:

1. Inventory is 3.8 million homes short. We need more homes to be built. We stopped building them after the market crash of 2008 and a lot of builders went out of business. Now, they’re back at it.

“I just locked in a 30-year mortgage at 2.375% a few weeks ago.”

2. Lumber costs are down. We’re down 46% from the all-time high we were at a few months ago. Although builders are still passing along the extra lumber costs to consumers, they don’t mind it because interest rates are still so slow. I just locked in a 30-year mortgage for 2.375% a few weeks ago.

3. Only two million homes are in the foreclosure or forbearance phases. They have an 85% pass-through rate, which means a majority of these homes won’t go to foreclosure.  The worst-case scenario is that we’ll have 15% of two million, which is about 300,000 homes in all of the U.S., that will go into foreclosure.

As you can see, we’re not in a bubble and not headed for a crash. If you have any questions about the market, buying/selling, or anything else related to real estate, don’t hesitate to reach out via phone or email. We look forward to hearing from you soon.