Source: KESQ —
Opinion by Dana Peterson for CNN Business Perspectives
Home prices have surged during the pandemic, leaving many to believe we’re either in a housing bubble or heading toward one.
The good news, however, is that the United States is not about to repeat the 2005-07 housing boom and bust, which led to the Great Recession. Basic supply and demand factors — not speculation, predatory lending and/or bad underwriting — are driving home prices. Moreover, a series of mortgage-market safeguards should prevent a hard landing when home prices recede.
Existing home prices were up 23.4% in June over the last year, according to the National Association of Realtors. This price spike reflects a pandemic-induced confluence of events, and demographic factors, which drove demand for homes, following more than 15 years of housing underinvestment.