The housing market madness is currently marking a clear shift in buyers’ mood and sentiment as the health crisis drags on. Whereas the Fed plunged mortgage rates to record lows and the federal government delayed the foreclosure wave via forbearances, a mass exodus from major metro areas due to the growing socio-economic chaos resulted in an unprecedented demand for new homes and a fierce bidding war.
According to several housing experts, homes are being snatched up right after being listed, and buyers’ euphoria is quickly draining the market’s supply and plunging inventory to ultra-low levels. A recent study shows the U.S. housing market is months away from completely running out of supply.
Meanwhile, the Federal Reserve policies continue to take the market towards another enormous housing bubble as prices explode all across the nation. However, the threat of rising mortgage rates, inflationary spikes, and a complex affordability crisis can lead to a catastrophic housing market crash that would sharply collapse property values just as seen during the mid-2000s bubble burst.
