flexiblefullpage - default
Currently Reading

Bubble or No Bubble, the Housing Market Is Bracing for Big Changes in 2023

Advertisement
billboard - default
Market Data + Trends

Bubble or No Bubble, the Housing Market Is Bracing for Big Changes in 2023

For the last two years, the housing market has been characterized by fast-rising home prices and surging interest rates, but today's homebuying conditions are far different from the real estate landscape preceding the Great Recession


December 20, 2022
Person pumping up green balloon surrounding small house
Image: Stock.adobe.com

The housing market is entering a period of extreme transformation after a pandemic-induced homebuying boom. Mortgage rates are rising, buyer demand is slipping, and home sales are slowing, but according to housing experts, a rumored ‘housing bubble’ isn’t about to burst—not yet, at least.

Over the past two years, the median existing home sale price in the U.S. increased faster than at any point since 2000, even outpacing home price growth seen during the run-up to the mid-2000s housing crash, Realtor.com reports. Now, price growth is cooling as sales slow, and once housing costs reach normal levels and inventory ticks up, experts say a housing market that so many feared was inching toward a bubble will at last begin to normalize.

The last housing bubble was protracted and painful, dragging the world’s financial markets down along with it. Home prices didn’t bottom out until 2012, according to existing-home sales data from the National Association of Realtors.

Economists say it’s different this go-round. Prices rose because there weren’t enough homes for sale to meet demand. And mortgage rates bottomed out to record lows in the mid-2% range, making it possible for buyers to afford higher prices as they weren’t paying as much interest. So prices climbed.

“The market is overvalued now. Prices have gotten way ahead of incomes, rents, and construction costs,” says Mark Zandi, chief economist at Moody’s Analytics. “The market is now correcting. … Over time, affordability will be restored and the market will find its footing.”

Read more

Advertisement
leaderboard2 - default

Related Stories

Market Data + Trends

Exurban Areas Saw Most Growth in New Construction During Q3

NAHB's latest Home Building Geography Index shows exurban areas had the largest increase in market share for both single-family and multifamily construction

Labor + Trade Relations

Labor-Shortage Headwinds Continue for Construction

Jobs report shows construction still faces a wide margin between available positions and the supply of workers to fill them

NAHB

NAHB CEO and President Jim Tobin's 2024 Housing Outlook

From affordability to homebuyer trends, Tobin offer insights into the future of the housing market

Advertisement
boombox1 -
Advertisement
native1 - default
halfpage2 -

More in Category

Get your sales and marketing teams together to create and deliver a consistent brand message from start to finish

Pundits may not agree on the timing nor the severity of the next economic downturn, but one thing’s certain: these 10 essential tactics will boost your business' efficiency, productivity, and profit

A closer look at what’s propelling the adoption of off-site construction methods in home building

Advertisement
native2 - default
Advertisement
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.