The housing market is forging its way through a historic boom with record high home prices exceeding even some of the biggest gains that preceded the financial crisis of 2008. As a result, market economists are fearful of a similar fate in 2022, especially after a 19.8% jump in home prices over just the past 12 months, but this time around, the housing sector could be saved by a lack of speculation in the midst of price overvaluation, Fortune reports.
Many regional markets are experiencing extreme price to income discrepancies, but rather than leading to a market collapse, many experts instead suggest that a lack of affordability could cause buyers to retreat at a steady pace.
Mark Zandi, chief economist at Moody's Analytics, doesn't foresee a housing bust over the coming year. However, he says "overvalued" housing markets could see home prices fall 5% to 10% over the next 12 months while national home price growth flatlines to zero. Why? The economic shock caused by spiking mortgage rates this year, he says, should finally rein in the rate of home price growth. We're already seeing signs of a cooling housing market.
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