Tony Katz Today
Analyst Claims The U.S. Housing Market in Another Bubble. Should Homeowners be Worried?
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Home price gains are accelerating again, and in some cities those values are overheating, according to Frank Martell, president and CEO of CoreLogic.
In an op-ed for CNBC, Martell claims that, "While low mortgage rates are keeping the market affordable from a monthly payment perspective, affordability will likely become a much bigger challenge in the years ahead until the industry resolves the housing supply challenge."
So should homeowners brace for the impact of another housing crash? Not according to financial economist and University of Indianapolis Professor, Dr. Matt Will, who told WIBC host Tony Katz the housing market is strong, and the challenges that analysts are seeing in the Denver, Houston, Miami and the Washington, D.C.,Metro Area housing markets are the result of a housing shortage due to overbearing regulation in those cities.
Dr. Matt Will:
There's not a bubble. What you mention in those four cities. What we have right now is a housing shortage.
In June, sales were down. Why? Because we didn't have enough housing. We had an 8.3% increase in housing starts last month - that's massive. And guess what? It wasn't enough. And there's two things that are stopping it: we don't have enough skilled labor, and regulation, because there are companies that cannot build.
...but again, housing starts were up 8.3%; that was 1.2 million new homes started. They need 1.5 million to keep up with demand. That's why sales were down in June. How can we have 8.3% new homes started, but sales be down? It's because there are not enough homes to keep up with demand in this robust economy.
While the housing market is struggling to keep up with demand, Dr. Will cautioned that there are some potentially negative economic triggers on the horizon for financial markets.
Click the link below to hear Tony's full interview with Dr. Will: