The term "housing-bubble" has been prevalent in conversation and google searches in recent weeks. Google recently reported that the search “When is the housing market going to crash?” had spiked 2,450 percent in the past month.
“Why is the market so hot?” doubled in the past week alone. Another scary search, “How much over asking price should I offer on a home 2021” jumped 350 percent.
According to CoreLogic, housing prices were up 10.4 percent year-over-year in February. That is the largest year-over-year increase since 2006.
“We’ve got an acute shortage of supply on the market for sale at the same time that record low mortgage rates are driving the appetite to buy by millennials and Gen-Xers,” said Frank Nothaft, chief economist at CoreLogic.
According to realtor.com, only half as many homes that were listed this time a year ago are currently on the market. The google search about paying over the asking price didn't sit well with Nothaft either. “I have to admit I’m worried when I hear that. It does make me concerned,” he said. “That’s the mindset that comes in, because that means it’s an auction market.”
According to Redfin, 42 percent of homes are selling for more than their list price. “The housing market is more competitive than we’ve ever seen it, but a couple indicators are causing us to ask whether we’re nearing a peak in terms of how fast demand and prices can grow,” said Daryl Fairweather, Redfin’s chief economist. “Sellers’ asking prices may be starting to flatten in what so far appears to follow a typical seasonal pattern.”
Fairweather cited a decrease in mortgage purchase applications as a sign that consumers are fed up with the massive rise of housing prices.
“Any hopes of 2021 bringing an influx of homes to the market and lessening pressure on prices appear to be dashed for now,” wrote Ben Graboske, president of data and analytics at Black Knight. “With higher interest rates and a continuing shortage of inventory, it will be important to keep a careful eye on both home prices and affordability metrics in the coming months.”