According to Realtor.com U.S. home prices increased 5.7%, year-over-year in August. This is the largest price increase over the past two years. Considering how strong the housing market has been over the past two years this is truly impressive considering the current economic conditions. Historic low interest rates, extremely low inventory and a shift in priorities for more living space have fueled the housing market.
With the 2020 election quickly approaching politics are on top of mind for most Americans. No matter what side of the political aisle you’re on it’s interesting to take a look at how housing differs between Red and Blue states. Here are some of the highlights according to the article on Realtor.com.
According to the S&P CoreLogic Case-Shiller Price Index, housing prices increased 3.5% in June 2020 over June of last year. This does not come as a surprise since after the country began to reopen, the pent up demand along with record low inventory levels, created bidding wars and houses were flying off the shelves. Of course since real estate prices are highly impacted by local factors many cities saw increases much higher than 3.5%.
Are we in a Bubble? Short answer is no. Of course there are certain areas throughout the country that could be "overvalued" or might have a price correction but based on the fundamentals we are not in a Bubble. People continually try to compare today's market with that in 2008 when the truth is today's housing market is exactly the opposite, in some keys ways, of what we saw leading up to the crash in 2008.
In contrast to 2008 we have an under supply (under building) of houses and there's no quick, short-term solution to change that. Lending standards are also much tighter than in the years leading up to 2008.
I recommend removing the "Housing Bubble" fear from your decision making process. If you're ready to buy a home then this is a great time. Of course you still need to be thoughtful and deliberate when buying a house to avoid potential mistakes.
