This is Mary Walden with economist MW welcoming you to the economic perspective. Today’s program looks at the next housing slump. Mike, with rising mortgage interest rates and slowing home sales, there are some whispers about the possibility of a housing slump. Of course, everyone in the housing market remembers the slump of all time during the Great Recession of 2007-2009. If we do have another pullback in the housing market, will it rival the one of a decade ago?
- Most analysts say no for several key reasons
- Home prices have been rising, but at a much slower rate than prior to the Great Recession
- Second, households are not overextended with debt – including mortgage debt – like they were prior to the Great Recession – debt payments as a % of household personal income is at a 30 year low
- Third, home-buying has not been in over-drive like it was a decade ago
- Home-buying is running two-thirds slower than ten years ago
- Indeed, next housing slump will be a traditional one, where prices are stable, rather than falling
And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.