Will The New Housing Bubble Pop Soon?

With the Fed raising interest rates, many are beginning to wonder how much longer soaring housing prices will last. They have been spiking over the past few years during the coronavirus pandemic. Now that the pandemic is beginning to slow down, many are hoping that the housing market, as well as inflation occurring elsewhere in the markets, will level off as well.

USA Federal Reserve Building
The US Federal Reserve raised rates by half a percentage point ā€” the biggest hike in two decades ā€” to fight inflation. This naturally will affect the housing market across the USA. CNBC

Just about all economists agree that prices can’t keep rising as they have been. They at least have to level off and rise more slowly. Too many people just can’t afford to buy now, especially with rising interest rates.

NPR

Luckily, experts are saying that this pop won’t be like the last one 15 years ago when the housing market crashed, putting us in a recession that lasted for years. Prices are expected to fall, especially in areas where they have peaked the most, but not so much so that it will cripple the economy. However it’s difficult to say when this might occur, especially now with the feds raising interest rates. And prices are not expected to drop as much as they are expected to simply slow down and continue to rise more steadily. Only areas with incredibly strong spikes, like Idaho and Arizona, are likely to see prices go down anytime soon.

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