Guest Post by Dr. Housing Bubble
The house humping pundits lock into anecdotal evidence and ignore larger changes in the housing market. For example, many kept harping on the fact that the Fed would never raise interest rates. Well here we are, with the first rate increase in many years. Many also claimed we were going to have a flood of Millennials buying homes but that also never materialized. The only thing they are focused on is price and that is being driven by big money, foreign investors, and people stretching their budgets to the max making their wallets burst at the seams.
The housing calculus overall is not good for most Americans. We have gained nearly 9 million rental households since 2005, the largest 10-year increase in history. At the same time, we have 8 million people that lost their home through foreclosure since 2004. Of these foreclosures 1 million happened in California, the perpetually sunny state. This seems to go against the notion that buying at any price makes sense. The reality is, we are undergoing a major rental revolution across the United States and a comprehensive Harvard study arrives at the same conclusion.
