“Our evidence points to abnormal US housing market behavior for the first time since the boom of the early 2000s,” the researchers wrote. “Reasons for concern are clear in certain economic indicators … which show signs that 2021 house prices appear increasingly out of step with fundamentals.”
Many Americans are still scarred by the last housing crash in 2007, which was fueled by cheap credit and lax lending standards that resulted in millions of homeowners owing more on their homes than they were worth.
But this time, the economists said they are worried about a different scenario.
Just because home prices are rising wildly does not always mean housing is in a bubble. And there are lots of reasons why home prices have risen steadily over the past decade — and shot up even more significantly in the past two years — including supply and demand imbalances in the market, rising labor and construction costs and how high or low the interest rates are for a mortgage, the researchers pointed out.
But they said prices may be rising to a point they call “exuberance,” in which prices…
