In the past month, the question, “When is the housing market going to crash?” surged 2,450%, and “Why is the market so hot?” doubled over just one week.

NEW YORK – Americans increasingly turn to Google for answers to their housing questions, and the phrase “When is the housing market going to crash?” surged in Google searches by 2,450% in the past month.

Consumers also asked, “Why is the market so hot?” – doubling in the last week – and “How much over asking price should I offer on a home in 2021?”, which increased by 350% in Google searches for the week.

Home prices can’t rise forever and will eventually plateau, but buyers planning for a housing crash like they saw a decade ago will likely lose out. According to the National Association of Realtors® (NAR), conditions are different this time around.

“This is not a bubble,” Lawrence Yun, chief economist for NAR, recently told Axios. “It is simply lack of supply.”

The nation has 1.03 million homes available for sale, a record low, and far from the peak of more than 4 million during the height of the last housing bubble in July 2007, according to NAR. And total active listings were down 54% year-to-year last week, data shows.

Mortgage lending is also much stricter now, and if a homeowner bought a home, they can afford to live in it – and in most cases accumulated equity from home price increases, which eases the foreclosure concerns seen in the earlier housing bubble. Investors are also active in the housing market, and that should serve as a backstop for major price declines.

“The housing market is more competitive than we’ve ever seen it, but a couple indicators are causing us to ask whether we’re nearing a peak in terms of how fast demand and prices can grow,” says Daryl Fairweather, Redfin’s chief economist. “Sellers’ asking prices may be starting to flatten in what so far appears to follow a typical seasonal pattern.” If that continues, she says the housing market will not be in a runaway home price speculation environment.

Also, with mortgage rates gradually on the rise, more potential buyers may find they’ve topped their affordability limit for now. Frank Nothaft, chief economist at CoreLogic, told CNBC he expects to see annual home price gains cool to the 3% range, instead of the double-digit annual increases seen over the past year.

Source: “‘When Is the Housing Market Going to Crash?’ Is a Red-Hot Search on Google – Here’s Why,” CNBC (April 13, 2021); “Are We in a Housing Bubble? Will the Housing Market Crash in 2021?” Redfin (April 13, 2021); “The Dispiriting Housing Boom,” Axios (April 11, 2021)

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