Economists warn that the housing market is headed for a bubble: Report

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Dallas Federal Reserve Bank warns that the housing market may be showing signs of weakness “signs of a brewing US housing bubble.” 

Its report says: the demand for homes will drastically outweigh the ones available for sale, ultimately driving the price up even more dramatically. This is often followed closely by “the bubble bursting,” which is a housing crash — the value of homes drastically drop, potentially contributing to a recession, similar to that of 2006.

The signs of this impending bubble are present, including rising mortgage rates that are the highest they’ve been since 2018 — according to Freddie Mac — and the national median listing price for a house spiking to $405,000, according to Realtor.com.

A website shared that a home listing price increased by 27 percent in the last two-years, partly due to remote workers moving to other locations. 

Experts use a statistical model called The to measure the possibility of a housing bubble. “exuberance indicator.”It is a fact that when prices rise above a certain point, it does not correspond with any other economic explanation. This drives the exuberance up. The closer you get to 95 percent, the more impressive it is. “abnormal explosive behavior,”The report states that

At the moment, the exuberance rate is 115 per cent. Economic analysts expect a housing boom due to this and other factors, such as the stock market and future rent discounts.

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