The 3 Warning Signs that Indicate an Impending Housing Bubble!
In this episode of the TruPodcast, we’re going to explore the 3 warning signs that will tell you if a housing bubble is about to burst.
It’s no secret that we’re in a time where the housing market is booming, but don’t get too excited because there are some very telling signs that say our party might be coming to an end soon. So before you invest your hard-earned money in your next investment property or buy a home, make sure you listen to this episode so you can avoid making costly mistakes later on.
There are signs of an impending housing bubble, but we are not talking about some data points that could tell us whether or not the housing market will crash.
Prices are above the housing bubble levels of 2006.
Prices have set several record highs in 2021, while the housing supply was ill-prepared for the increased demand due to the pandemic. Additionally, the housing market has been experiencing FOMO, which has driven the prices of the housing market to a point where a substantial portion of potential homebuyers cannot afford to buy.
More Small Houses are Hitting the Market. Will These Houses Slow the Impending Housing Bubble?
The share of small houses that were for sale in July 2021 increased. But will these houses make it more affordable for homebuyers going forward? A small house as defined by Realtor.com is between 750 and 1,750 square feet. The average median for these types of houses in July 2021 was $385,000.
The “F” Word that Could Cause an Impending Housing Bubble
For the first week of August, homeowners that are in forbearance came in at 1.6 million. Overall, that is a reduction from 3.40% to 3.26%. This segment of homeowners is in jeopardy of losing their homes. You might be saying this sounds like our last housing bubble, but this time it is different. There are more homeowners that are using forbearance as a financial tool, but unfortunately, forbearance is not a tool that you should use for a long period of time.