Many people are wondering if all this positive news about the housing market and increase in home prices is setting up the market for another housing bubble. The answer is no.
This market increase is very different in several ways.
- Credit has tightened – prior to the housing bubble, loans were very easy to get and that is not the case today
- Homes for sale were abundant – now the market lacks homes for sales, builders are building, some sellers are selling, but no one can keep up with the demand we are facing right now
- Interest rates are low – the low interest rates are motivating buyers to buy now rather than wait as the interest rates are on the upswing
- Foreclosures are declining – the decline in foreclosures is helping the price of homes to increase
During the current phase of home price increases, the market is very different from the market prior to 2006 and the price increases are healthy market driven increases, rather than being falsely inflated.