Home prices can't go straight up forever. But this probably isn't a bubble

  • by:
  • Source: CNN
  • 07/29/2021
New York (CNN Business)Home prices are climbing at the fastest pace in history, eclipsing even the boom in the days leading up to the Great Recession. Bidding wars have become common, many are forced to pay all cash and some bids are coming in $1 million over asking.

It's all sparking fears that the United States is in the middle of another housing bubble that will end in a terrible crash. Industry executives and economists agree this explosion in home values is unsustainable, as home prices can't go up 20% year-over-year forever.

Yet today's housing market is very different from the mid-2000s bubble that wrecked the economy. 

Unlike then, there is currently a massive shortage of homes and home builders are being very cautious about adding new supply.
147/365: housing bubble by Mark Bonica is licensed under Attribution 2.0 Generic (CC BY 2.0)

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