The Freddie Mac analysts also calculated that it has been less expensive to own than to rent similar properties since 2000, and the cost of owning a home has been generally declining for more than 10 years. “Thus, it is understandable that homeownership rates keep rising even with a weakened economy,” they wrote.
“Clearly, some localized housing markets are at risk — those with a highly inelastic housing supply, such as San Francisco, for which demand shifts translate into large price movements — and they could see a fall in home values if demand drops,” according to Nothaft and Cutts. “But that is not a bubble, it’s just fundamental volatility.”
To read the complete commentary, including three charts, click here.
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