{"id":73726,"date":"2022-01-21T06:00:56","date_gmt":"2022-01-21T14:00:56","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=73726"},"modified":"2022-01-20T17:37:13","modified_gmt":"2022-01-21T01:37:13","slug":"homebuyer-survey-housing-bubble","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/homebuyer-survey-housing-bubble\/","title":{"rendered":"Are We in a Housing Bubble? Homebuyers Say Yes, Redfin Expert Says No"},"content":{"rendered":"<p><i><span style=\"font-weight: 400;\">Historically fast home-price growth has homebuyers and sellers worried the market has become detached from reality. But Redfin\u2019s chief economist says rising mortgage rates and buyers who can afford their homes are preventing a bubble.\u00a0\u00a0<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">More than three-quarters (77%) of homebuyers and sellers believe there\u2019s a housing price bubble in the area where they live, according to a recent Redfin survey.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Meanwhile, 44% of real estate agents believe there\u2019s a housing bubble in the market where they work.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The former is from a Redfin-commissioned survey of 1,500 U.S. residents who are planning to buy or sell a home in the next 12 months fielded by research technology company Lucid from December 10 to 13, 2021. The latter is from a Redfin survey of 360 real estate agents from October 2021.\u00a0<\/span><\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone wp-image-73727 size-large\" src=\"https:\/\/www.redfin.com\/news\/wp-content\/uploads\/2022\/01\/bubble-survey-1024x768.png\" alt=\"\" width=\"1024\" height=\"768\" srcset=\"https:\/\/www.redfin.com\/news\/wp-content\/uploads\/2022\/01\/bubble-survey-1024x768.png 1024w, https:\/\/www.redfin.com\/news\/wp-content\/uploads\/2022\/01\/bubble-survey-300x225.png 300w, https:\/\/www.redfin.com\/news\/wp-content\/uploads\/2022\/01\/bubble-survey-768x576.png 768w, https:\/\/www.redfin.com\/news\/wp-content\/uploads\/2022\/01\/bubble-survey.png 1201w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/p>\n<h4>What is a housing bubble?<\/h4>\n<p><span style=\"font-weight: 400;\">A <\/span><a href=\"https:\/\/www.redfin.com\/blog\/are-we-in-a-housing-bubble\/\"><span style=\"font-weight: 400;\">housing bubble<\/span><\/a><span style=\"font-weight: 400;\"> is characterized by rapid unsustainable growth in home prices, eventually \u201cbursting\u201d when demand no longer supports the high home values, followed by sharp price declines. It\u2019s typically caused by an influx of demand from homebuyers and real estate investors.\u00a0<\/span><\/p>\n<h4>Redfin Chief Economist: We\u2019re not in a housing bubble<\/h4>\n<p><span style=\"font-weight: 400;\">The housing market has been <\/span><a href=\"https:\/\/www.redfin.com\/news\/real-estate-bidding-wars-november-2021\/\"><span style=\"font-weight: 400;\">ultra-competitive<\/span><\/a><span style=\"font-weight: 400;\"> since the coronavirus pandemic upended American society in mid-2020, ushering in an era of remote work and record-low mortgage rates that have resulted in strong homebuyer demand and a severe supply shortage. Median home prices have been <\/span><a href=\"https:\/\/www.redfin.com\/news\/home-sales-down-11-pct\/\"><span style=\"font-weight: 400;\">growing by double digits<\/span><\/a><span style=\"font-weight: 400;\"> all year long.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cHomebuyers and sellers are rightfully concerned about how fast prices are rising, especially those who remember the housing market crash during the Great Recession,\u201d said Redfin Chief Economist <a href=\"https:\/\/www.redfin.com\/news\/author\/darylfairweather\/\">Daryl Fairweather<\/a>. \u201cIf this rate of price growth were to continue for another year, I would be worried about a bubble, too, but I predict home-price growth will <\/span><a href=\"https:\/\/www.redfin.com\/news\/housing-market-predictions-2022\/\"><span style=\"font-weight: 400;\">slow significantly<\/span><\/a><span style=\"font-weight: 400;\"> in 2022. What we\u2019re going through right now is closer to a ripple in the water than a bubble. Mortgage rates are already going up, which will likely stabilize demand and reduce the risk of a bubble that could burst.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Average 30-year mortgage interest rates have already risen roughly 0.5 percentage points since the beginning of the year, landing at <\/span><a href=\"https:\/\/www.redfin.com\/news\/housing-market-update-rates-rise-homebuyer-urgency\/\"><span style=\"font-weight: 400;\">3.56%<\/span><\/a><span style=\"font-weight: 400;\"> in the week ending January 20, and they\u2019re likely to continue increasing. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Inflation, which climbed to its <\/span><a href=\"https:\/\/www.nytimes.com\/2022\/01\/12\/business\/economy\/cpi-inflation-december-2021.html\"><span style=\"font-weight: 400;\">highest level<\/span><\/a><span style=\"font-weight: 400;\"> in 40 years at the end of 2021, also reduces the risk of a housing bubble, Fairweather said. With the prices of goods and services significantly higher than they were a year ago, people have less disposable income to put into the housing market.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The pandemic-driven housing boom is fundamentally different from that of the mid-2000s, when loose lending criteria allowed many homebuyers to take out mortgages they couldn\u2019t afford. That resulted in millions of foreclosures and a sharp decline in home prices. Today\u2019s lending practices\u00a0 are much stricter, ensuring that buyers can afford their monthly payments. Additionally, this boom is characterized by Americans <\/span><a href=\"https:\/\/www.redfin.com\/news\/november-2021-housing-migration-trends\/\"><span style=\"font-weight: 400;\">moving<\/span><\/a><span style=\"font-weight: 400;\"> to new parts of the country and new neighborhoods <\/span><i><span style=\"font-weight: 400;\">because <\/span><\/i><span style=\"font-weight: 400;\">of their relative affordability.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThe housing market is much stronger than it was before and during the Great Recession,\u201d Fairweather said. \u201cThere\u2019s a very low likelihood that home prices will go down anytime soon.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Historically fast home-price growth has homebuyers and sellers worried the market has become detached from reality. But Redfin\u2019s chief economist says rising mortgage rates and buyers who can afford their homes are preventing a bubble.\u00a0\u00a0 More than three-quarters (77%) of homebuyers and sellers believe there\u2019s a housing price bubble in the area where they live, [&hellip;]<\/p>\n","protected":false},"author":13153,"featured_media":73728,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[8],"tags":[36,35],"dashboard":[],"coauthors":[124,62],"class_list":["post-73726","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-housing-market-news","tag-economics","tag-redfin-surveys"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.7 (Yoast SEO v27.6) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Are We in a Housing Bubble? 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