Two months into the new year, consumers are spending less, economic growth has slowed, the inflation rate has declined (although arguably not as much as the Fed would like), and the over-heated housing market has cooled.Read More
The sizzling housing market is cooling off ─ or maybe it isn’t. The answer depends on the numbers you use and the analysts you believe. The numbers support different conclusions and the analysts disagree.
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.
Two major issues dominated the news in late July: Inflation – whether it is, is not a problem or is likely to be one; and the prospect that millions of renters would be evicted from their homes as a federal moratorium barring evictions for nonpayment of rent expired.
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.