The past 15 years have been a “yo-yoing insanity” when it comes to home prices, as The New York Times’ Neil Irwin puts it. But today’s prices seem stable.
Sentiment among both buyers and sellers is also fluctuating, going through phases of “irrational optimism and pessimism,” Irwin writes.
Now that nationwide home prices look relatively normal when compared with incomes, rents, and other fundamentals, and analysts see this as the beginning of a new era of balance in the housing and rental markets.
“The market is settling into a balance in which buyers are comfortable spending what they can afford given their income and savings,” Irwin adds. “Among buyers there is neither a sense of desperation to buy now on the assumption prices will rise rapidly, nor of fear they will plummet.”