When it comes down to it, the opinions that carry the most weight are the ones based on experience and expertise. Here’s what leading industry influencers have to say:
“. . . conditions today are quite different than in the early 2000s, particularly in terms of credit availability. The current climb in house prices instead reflects strong demand amid tight supply, helped along by record-low interest rates.”
– The State of the Nation’s Housing 2021 Report, Joint Center for Housing Studies
“The housing market is in line with fundamentals as interest rates are attractive and incomes are high due to fiscal stimulus, making debt servicing relatively affordable and allowing buyers to qualify for larger mortgages. Underwriting standards are still strong, so there is little risk of a bubble developing.”
– Nathaniel Karp, Chief U.S. Economist, BBVA
“Looking back at the bubble years, house prices exceeded house-buying power in 2006 nationally, but today house-buying power is nearly twice as high as the median sale price nationally. . . . Many find it hard to believe, but housing is actually undervalued in most markets and the gap between house-buying power and sale prices indicates there’s room for further house price growth in the months to come.”
– Mark Fleming, Chief Economist, First American
“It’s not clear at all to me that things are going to slow down significantly in the near future. In 2005, I had a strong sense that the hot market would turn and that, when it turned, things would get very ugly.
Today, I don’t have that sense at all, because all of the fundamentals are there. Demand will be high for a while, because Millennials need houses. Prices will keep rising for a while, because inventory is so low.”
– Bill McBride, Calculated Risk
All four strongly believe we’re not in a bubble and won’t see crashing home values like we did in 2008. This is good news for homebuyers as you can rest assured it isn’t like the last time.