Are United States Housing Prices too High?
The United States had a massive housing crash about a decade ago. That crash was brought on by over building and loose lending guidelines. Housing prices have increased a lot since the crash and many people think another housing crash is coming. A lot of investors feel that affordability is out of control, which will cause major problems in the housing industry. I do not agree and I found some cool stats to consider.
Overbuilding was one reason for the last crash. Builders went crazy because almost anyone could buy a house. Check out the graph below.
This graph shows housing starts in thousands in the US. From 1990 to 2007 they built a lot of houses. It seemed crazy how many houses they were building in the mod 2000's, but they built many houses in other periods as well. What is interesting to me is how few houses they built in the last decade. They built almost no houses many years in a row. And while building has increased, it is still at very low levels. FYI, 2018 stats show about 1,200,000 housing starts as well which is really close to where thus graph leaves off around 2016. One reason prices have increased is that there are way too few houses for the current population. You meed to consider there are 40 million more people in the US now than there was in 2000.
what about affordability?
Many people claim that the inventory of houses avilable to buy does not matter because people cannot afford homes and that will cause a crash. Here is another graph to consider.
This graph shows how affordable United States housing is considered to other countries. The US is one of the cheapest places to buy a house. While our prices are higher than they were, it is still affordable. Yes, San Francisco is expensive, but Sydney is even more expensive. Australia has had an incredibly unnaffordable housing market for 3 decades with no crash. Just because housing is unnaffordable does not mean it will crash. People tend to figure it out.
Could the market decine? Yes. Could the market crash? Yes. Do I think it will? No? Not until they build more. https://investfourmore.com/2017/06/05/will-another-housing-market-crash/
In some states or counties they are. I do not know if supply and demand account for the price differences, though. There has to be some speculation going on.
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United States Housing Prices too High Its common think..
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I'm young and waiting for the next crash to even consider buying a house. Prices are high bit I will wait and play the game.
You might be waiting a while
But what factors make a home a little expensive, as in a little bit more than regular.
Are environmental factors considered