Why the Housing Market Hasn't Crashed YET

If you live in the U.S. and are hoping to buy a house in the near future, you’re out of luck. During the pandemic, a mass exodus occurred from cities to the suburbs. People bought their first homes with incredibly low mortgage rates. However, the good times couldn’t last, and this high demand for houses led to a severe drop in supply. And when there is high demand and low supply, prices go up. This is exactly what happened with the housing market in the United States. But what goes up must come down, and now everyone is waiting for the housing market to crash. The only question is, when is that going to happen? Watch and find out!

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[RaymondKeen.]

The fact that there is already an excessive amount of demand awaiting its absorption, despite how everyone is frightened and calling the crash, is another reason why it is less likely to occur that way. 2008 saw no one, at least not the broad public, making this forecast, as I'll explain below. The ownership rate was noted to have peaked in 2004 in the other comment. Having previously peaked in the second quarter of 2020, we are currently at the median level. Between 2008 and 2012, it dropped by 3%, and by the second quarter of 2020, it had dropped from 68 to 65.

[BateserJoanne]

I anticipate a housing market downturn due to the numerous individuals who purchased homes above the asking price, even with favorable interest rates. Despite the low rates, many are now at risk because they lack equity. If housing prices continue to decline, they may face difficulties selling or even risk foreclosure if they can no longer afford the property. This scenario is likely to impact a substantial number of people, particularly with the anticipated surge in layoffs and the rapid increase in the cost of living.

[Nixon]

ok let's be real though.... it's not first time home owners buying up all the houses; it's hedge funds and property management firms.

[Rochelletrem]

In spite of how everyone is frightened and calling the crash, there is already an excessive amount of demand waiting to absorb it, which is another reason it's less likely to happen that way. This forecast was not made in 2008, at least not by the general public, as I will explain below. The ownership rate peaked in 2004, according to the other comment. We reached a peak in the second quarter of 2020 and are currently at the median level. From 2008 to 2012, it fell by 3%, and in the second quarter of 2020, it dropped from 68 to 65.

[leodrd]

When my wife (22) and I (24) were going out to buy our first home a year ago, we were getting out bid by older couples (50's-70's) who were paying cash. This happened eight times, we were talking to our agent and she told us most of these older folks, at least those using her services, were buying multiple properties. So, nah, I kinda do blame the older generations, hedge funds, and property business, looking to make a quick buck, for making this mess.

[andrew.alonzo]

In my opinion, a housing market crash is imminent due to the high number of individuals who purchased homes above the asking price despite the low interest rates. These buyers find themselves in precarious situations as housing prices decline, leaving them without any equity. If they become unable to afford their homes, foreclosure becomes a likely outcome. Even attempting to sell would not yield any profits. This scenario is expected to impact a significant number of people, particularly in light of the anticipated surge in layoffs and the rapid increase in the cost of living.

[bradwallace]

The real problem with prices are investors buying houses only to drive pricing up.. billionaires buying entire neighborhoods and bumping up prices

[neofulcrum]

With these crazy housing prices, I don’t blame anyone still living with their relatives. Better than being homeless.

[jessehappel]

The government needs to make house hoarding by corporate companies illegal. That or charge a hefty tax.

[danikeir]

Only reason why it my husband and I were able to buy our home at such a manageable price in 2011 was because we were able to purchase before investors were able to buy... There was a policy in place that allowed first-time home buyers to buy certain inventory first.. that law is gone now and investors and corporate America are buying so much of the supply there's not enough for first-time home buyers to even touch it. We're stuck in our starter house with not enough space but my sympathy goes out to people that can't even buy their first home... It's disgusting.

[roughtoast]

Love how you stated millennials love to buy homes, most of us are either homeless or working that many hours and trying to move up in the world just to pay our rent, let alone buy a house.

[braxxian]

Same thing happened in Australia. All the rich inner city people move out to rural areas during covid because their white collar jobs allowed them to work from home. They inflated the prices of the rural properties so much that the locals can no longer afford to live in their own towns.

[College.is.a.ripoff]

The main answer to this is that investors are hoarding houses. He explains it towards the end of the video.

[Redrune]

Something not being mentioned enough is the severe lack of affordable new homes. I live in GA and the only homes being built here are massive 2 story homes on a basement and a tiny lot for $500k+

[kennethweber]

I am a Canadian earning almost twice the average national income and still choosing to split renting a house with 5 other young post grads as opposed to buying property. I have so many reasons to seek my own place (soon to be fiancee, years of living in this type of situation) and older generations seem surprisingly empathetic to my situation until a solution is proposed that inevitably risks a factor of their wealth, at which the oppose any kind of change.

And so without government intervention, the situation will not change until the number of perspective home buyers outnumber home owners, and a federal politician frontrunner realizes this.

I can't help but feel like being born in the late 90s is a bit of an economic curse to most my age.

[BANDITDAY]

A crash isn’t coming. This is a good video But, one stat that he didn’t mention, was 70% of mortgage holders have an interest rate below 4%. 85% have an interest rate below 5%. 99% of mortgage holders have an interest rate below 6%. People aren’t giving up their record low interest rates so they can turn around and buy another house with a mortgage rate above 6%. The housing market is broken for years to come.

[taproot]

One thing I wish was stressed more is just HOW MANY units are just being left empty instead of being sold or rented out. There are 16 MILLION empty homes in the US because massive investment firms would rather artificially limit supply than allow people to afford a roof over their heads because by limiting the supply, the price increases, thus the value increases, thus it can be counted as profit for that quarter.

The second thing I want to point out is that while there are new regulations to prevent shady mortgage deals, it ALSO means that someone who is currently paying $1, 400 or $1, 800 a month for rent on an apartment will get denied for a 30 year mortgage that would cost them $800 or $1, 000 a month to pay off. (Which is just another example of why it's surprisingly expensive to be poor in the US but that's another rant for another day.)

[JustinDanielDunn]

It affects apartments too, I live in the Seattle area. A one bedroom is around $2000. I only make $2, 500 a month. And I make too much money to qualify for food stamps. 😢 The sad thing is much wealthier people are buying apartments instead of houses here too which is driving up the price higher.

[ford]

Well for the first reason, I think those groups are looking at homes instead because apartments are just too expensive nowadays and you're pretty much throwing away your money in comparison to paying off a mortgage.

[PecanPie]

A single law that would solve this demand issue is any person or corp can only buy 5 homes before they cannot buy any more residential properties. This includes single-family, condos, apartment complexes, townhouses and duplexes. Too many corps like Zillow and Blackrock buying too many properties trying to either flip or force people to forever rent. No one person needs more than 5 residential properties and definitely no corps need any property to turn into forever rentals.