The housing market is always known to be wild. The infamous incident that occurred a little over a decade ago is still fresh in our minds, when the housing market crashed and as a result, we fell into a disastrous recession. To be fair, the regulations were pretty terrible at the time and the housing market was in a massive bubble, but it was still pretty scary. The housing market also saw a rapid increase in the aftermath of the COVID-19 pandemic due to rates being low, a massive increase in demand, and supply chain issues with commodities like lumber, and this one looks to be more healthy than 2008.
However, this red hot market seems to be cooling down now. On Monday, the US home sales report was released, and it gave us some insights. Existing home sales rose 2 percent from the previous month, which was small compared to the last couple of months. The reason why home sales rose is because existing home prices rose 17.8 percent from July 2020, which is making more homeowners put their houses on the market. This, as we’ve discussed before, is causing first time buyers to be pushed out of the market, which is causing demand for house rentals to skyrocket. This is leading to rental prices being on the rise too, although like we said, the market is definitely going through a cooldown. Once things get fully straightened out from the pandemic, we can expect to see a more balanced market. Have you had any experiences with the current housing market?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.