The Housing Market is Unlikely to Crash: This is Why

1. Low Interest Rates:

The Federal Reserve sets the interest rates that banks use to lend money to consumers. The chart below shows the federal funds rate, which is the interest rate at which banks lend money to each other overnight. As you can see, the rate has been kept low since the financial crisis in 2008.

Source: https://fred.stlouisfed.org/series/FEDFUNDS

Low-interest rates have made it cheaper for consumers to borrow money, including mortgages, which has led to increased demand for housing.

2. Limited Housing Supply:

The chart on this link below shows the number of new housing units authorized by building permits. As you can see, the number has been relatively flat since the financial crisis.

Source: https://fred.stlouisfed.org/series/PERMIT

This indicates that there is a limited supply of housing, which has driven up prices.

3. Strong Demand:

The chart on this link below shows the number of existing home sales. As you can see, the number has been increasing since the financial crisis.

Source: https://fred.stlouisfed.org/series/EXHOSLUSM495S

This indicates strong demand for housing, which has further driven up prices.

4. Government Interventions:

The chart on this link below shows the delinquency rate on single-family mortgages. As you can see, the rate has been declining since the financial crisis.

Source: https://fred.stlouisfed.org/series/DRSFRMACBS

This indicates that fewer homeowners are struggling to make their mortgage payments, which has helped stabilize the housing market. Additionally, the government has tightened lending standards to prevent risky loans.

Overall, these charts demonstrate that the low-interest rates, limited housing supply, strong demand, and government interventions have helped stabilize the housing market and prevent a significant crash. However, it is important to monitor these factors and stay informed of any potential risks or changes in the market.