Originally posted April 16, 2020
A housing market crisis is coming to the United States. Even if it doesn’t look anything like the previous one, it won’t make it any less painful. While there has been no rampant speculation or subprime mortgage fraud like in 2008, the housing market is overvalued. Home prices are now at 117% of their prior peak level in 2006.
The coronavirus pandemic will force many cash-strapped Americans to sell their homes, flooding the market with oversupply. The problem is there will be fewer buyers as people have less money to spend.