Analytics firm CoreLogic argued in its latest MarketPulse report that the housing market is not on the road to bubble territory, and rising interest rates will only make it less likely for it to head in that direction.
“Economists are often referred to as dismal scientists because of their emphasis on the downside of economic events. However, CoreLogic is prepared to offer an optimistic opinion about the U.S. housing market,” read the report. “CoreLogic does not believe the market is experiencing a housing bubble, either nationally or even in some of the fastest-growing markets.”
The firm also said that housing today remains highly affordable relative to historical norms.
“For housing price affordability to return to the average level that we saw in the years between 2000 and 2004, either home prices would have to rise an additional 47 percent or interest rates rise to 6.75 percent,” CoreLogic said.
“So while the bubble opinions swirl like the words of Shakespeare, ‘Double, double toil and trouble/Fire burn and caldron bubble,’ this housing market still has a long way to go before the caldron bubbles over,” the report later added.