When is a Housing Crash NOT a Housing Crash?

After a 6 month period of historic mortgage rate increases, the mortgage rates have slowed, finishing this week down for the 3rd straight week.

But, the real estate news industry is still looking for headlines to scare readers as the market continues on a more historically normal pace than any time in the last 3 years.

Example: Barbara Corcoran. She sold her company, and now is a television "taking head." Yahoo Finance quotes her as "The Housing Market is Overinflated." Wow, that sounds like prices are ready to drop, much as the stock market has. But really, she says "...the demand is so much far exceeding how many houses are out to go around. No, I think we're going to have a needed softening in the market, meaning prices aren't going to go up as fast if you could call that a softening." Well, that does not sound overinflated.

Fortune Magazine, not to miss out on clicks to sell their ads, screams "The housing market just slid into a full-blown correction." That sounds ominous!

But, again, dig deeper, look at his data, and he really is saying "he doesn't think nationwide home prices will drop, he says they're likely to see "real" home price declines. That's economic speak for inflation growing faster than U.S. home prices.

So, he is describing an economy with inflation maybe at 8% and housing prices going up at 7%. Well, if you are borrowing at 5.5%, you are still going to be ahead, and, if inflation is to be 8%, where else would you invest besides real estate?

Desperate for their share of readers, CBS News makes a silver lining when it pushes "House hunters take note: The blazing-hot housing market is finally cooling down." So, they are saying its a good time to buy BECAUSE housing prices will not go up more? Does that make sense? The reason people buy homes is they expect them to go up, not stay flat or go down.

One of the reasons housing demand will remain strong is despite few homes being built, more families are being formed, requiring more housing. We have a trend that has been increasing since the 2008-2009 Global recession, and post-pandemic, has recovered back onto that rising rate from before the pandemic.
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