The overheated employment market appears to be cooling off, but probably not fast enough to demonstrate the progress the Federal Reserve wants to see in its efforts to combat inflation, still growing at an uncomfortable 8 percent annual rate.Read More
Judging by news reports and opinion pieces in trade publications and mainstream media, the risk of a housing bubble probably ranks as the top concern of many economists and real estate industry executives today. But fear of resurgent inflation is a close second. Home prices and a housing shortage are feeding the bubble fears, as we’ve discussed before; consumer prices and an increasingly rocky labor market recovery are creating the inflation jitters.
Is the housing boom creating a dangerous bubble? In every boom-and-bust real estate cycle – and there have been a lot of them – experts have suggested and consumers have believed that the boom they were seeing, unlike all the others, would not be followed by a decline. And every boom-bust cycle in the past has proven them wrong.
Reports on housing market conditions during the past year have chronicled the disconnect between an economy hobbled by the pandemic and a housing market that seems to exist in an alternate universe, seemingly unaffected by lockdowns, job losses, and economic uncertainty.