Americans priced out of the housing market may be hoping for a crash, but they shouldn’t be holding their breaths, according to economists.
The housing market doesn’t appear to be poised for a crash in the near future, Business Insider reported. Yet, 44 percent of Americans believe a plummet could come this year, according to a LendingTree survey, and a third of those respondents said they actually want it to happen so the market could be more affordable.
“[There’s] just simply not enough supply,” National Association of Realtors chief economist Lawrence Yun told Insider. “So the economics of supply and demand, if there’s a shortage, prices simply cannot crash.”
The country is short between 2.3 million to 6.5 million housing units, according to Realtor.com.
Homebuyers have been stuck between elevated mortgage rates — though those have eased up in recent months — and high home prices. In March, home prices were up 6.5 percent year-over-year, according to the S&P CoreLogic Case-Shiller Home Price Index.
But while a market crash may bring down prices, that’s not all that would occur, so doom prognosticators should be careful what they wish for. When the market crashed 15 years ago, pushed in part by an oversupply of homes, the Great Recession quickly followed. People lost their jobs and livelihoods. Lower home prices meant squat for those who needed to focus on much more immediate issues.
As for today, there are mixed opinions from experts and economists about when the next housing market crash could happen, though these things are sometimes thought to occur in 18-year cycles. There’s been speculation the country is in the midst of a housing bubble, but experts largely don’t see this as the case today, as tight inventory would stop prices from bottoming out even if demand suddenly falls off.
Potential signs or symptoms of a housing crash include sudden drops in demand, inventory oversupply, increased mortgage rates, accelerated home production or a greater economic condition, such as a recession.
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