The 2025 housing market poses significant challenges due to high mortgage rates and soaring home prices, making it potentially tougher for buyers than in preceding years. Understanding the concept of a housing bubble or bust is crucial, with bubbles marked by speculation and easy credit while busts involve price drops often spurred by rising interest rates. The U.S. currently experiences a housing shortage, with estimates suggesting a deficit of 2.3 to 6.5 million homes, meaning prices are likely to remain high despite demand, causing concerns for prospective buyers hoping for more affordable conditions.
If you're trying to understand how to quantify a housing bubble or a housing market bust, it's okay to ask questions about what this exactly would mean. A bubble would be any instance in which rapid price increases are driven by heavy speculation or easy access to credit, as was the case pre-2008 and during the Great Recession.
According to insights from Realtor.com, there is a definite housing shortage in the United States, with at least 2.3 million to 6.5 million homes. Given this, there is "simply not enough supply," according to Lawrence Yun, the chief economist for the National Association of Realtors.
The good news is that experts don't seem to predict a crash, but it still begs the question of whether or not you should buy a home in 2025 or wait.
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