economy Markets

Don’t Worry: The Housing Bubble Is Alive And Well

At least the housing bubble is intact. Existing home sales defied expectations for a decline, rising 4.3% in October to a blistering 6.85 million pace. The range of forecasts was 6.18 million to 6.74 million, so the headline print is better than the most optimistic guess from more than six-dozen economists. It was the fifth consecutive month of growth. The 6.85 million annual rate represents a near 27% YoY gain. Median prices rose 16% from October of 2019 to $313,000. The market tightened, with inventories falling to levels that would be exhausted in just 2.5 months at the current rate of sales. "Considering that we remain in a period of stubbornly high unemployment relative to pre-pandemic levels, the housing sector has performed remarkably well this year," NAR's chief economist, Lawrence Yun, remarked. Of course, the pandemic is in no small part responsible for what is quite clearly a new housing bubble. A constant theme in these pages over the past several months has been the extent to which the interplay between de-urbanization trends (catalyzed by the pandemic) and record-low mortgage rates (in part facilitated by the Fed) have fueled gains at a time when the broader e
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1 comment on “Don’t Worry: The Housing Bubble Is Alive And Well

  1. Jesse says:

    So much for the wisdom of the crowd.

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