Is This Similar to 2008?

With home prices continuing to climb, many folks are astonished at the increase in cost of living. With increases in interest rates as well as home prices, the overall payment for a home has gone up dramatically over the past 2 years.

While many want to point to the fact that the Case Shiller home price index is near it’s peak, the facts remain that there simply is not enough housing supply for the population. Even if demand for housing remains the same, when there are fewer and fewer homes for sale, prices will naturally go up. This is the classic supply/demand equation in economics.

According to Realtor.com, there is a shortage of 6.5 million single family homes available. Couple this with the fact that there are more buyers than ever, with the Millenials making up the vast chunk of this group, and you get prices continuing to climb.

I once heard a real estate agent say, “Marry your home, date your mortgage.” This is a good strategy for those primarily concerned about higher than recent interest rates. You can always refinance if they go lower.

But the question is, will they go lower anytime soon?

Nobody has a crystal ball, but it seems like housing costs are going to remain elevated for the foreseeable future due to lack of supply.

Just a thought, but maybe the newly trending tiny homes will see a boom in the near future.