Dallas, TX

America Might Be In Housing Bubble, Warn Experts

Matt Lillywhite

The Dallas Federal Reserve is concerned about a potential housing bubble brewing in the United States. "Our evidence points to abnormal U.S. housing market behavior for the first time since the boom of the early 2000s. Reasons for concern are clear in certain economic indicators—the price-to-rent ratio, in particular, and the price-to-income ratio—which show signs that 2021 house prices appear increasingly out of step with fundamentals."

Experts are also worried that some real-estate properties in the United States are overvalued and in need of a price correction. According to CNN, "U.S. home prices have soared to new heights and keep on climbing, and now some researchers and economists are saying they have seen signs of a housing bubble brewing." If home prices keep going up, everything should be fine. However, problems will obviously arise if the (potential) bubble pops.

During an interview with CBS News, Danielle Hale, chief economist at Realtor.com, said the rate of home price growth was unsustainable. However, she also mentioned it's hard to predict when the housing market will cool down. "Double-digit price increases and rent increases can't go on forever."

Redfin agent Ian Rubinstein echoed a similar opinion during an interview with Fox Business. "Being in the real estate business, I want this to go on forever," he said. "But being rational? It can't possibly sustain itself."

Another reason for the surge in real-estate prices is favorable tax laws and a low cost of living in some areas of the country. For example, Texas has a business-friendly climate - with no corporate or personal income tax. And according to the Office of Governor Abbott, "Texas continually ranks as the Best State for Business by the nation's top CEOs." So, it's not a surprise that housing prices in Texas are skyrocketing.

What do you think? Leave a comment with your thoughts. And if you think more people should read this article, share it on social media.

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