Federal Reserve warns of "brewing U.S. housing bubble"
CBSJUL 2022
The so-called "bubble" is based in large part on decades of underbuilding, which has created a growing supply shortage. Moreover, the fundamentals this time are nothing like those of the crash in 2008. Loan underwriting standards have improved since then, and household balance sheets are much healthier.
The run-up in housing prices - not to mention rents for single-family homes - is a direct result of the entrance of private equity into residential housing markets. Pools of investment capital are driving up home prices across the country and ensuring that the American Dream is no longer a reality for most.
There is good reason to think that this already-inflated housing market still has a long way to run, and the majority of new mortgages will continue to go to buyers with the most means and the highest credit scores. This means that the housing market is likely to further exacerbate the growing divide between the haves and the have-nots.