NewsNo US Housing Bubble Crash in Sight, Expert Says by Sylvia Shalhout July 16, 2020July 16, 2020 by Sylvia Shalhout July 16, 2020July 16, 2020At the beginning of 2020, the US housing market was one of the leading sectors in the nation’s economy. Home sales (both new and existing) were high, purchase applications were up year-over-year (YoY) by double digits, and by February, housing starts were seeing a 40% YoY growth. Although real estate started the year at a high point, the coronavirus pandemic brought with it the talk of a housing bubble crash. Many feared a repeat of the 2008 housing crisis and as sales essentially froze, some players in the real estate market were confident that a housing bubble crash would happen by 2020 or 2021. However, an expert at HousingWire reports that a US housing bubble crash is not on the horizon. A Housing Data Analyst Weighs InMy advice is to take the next three months of housing data and put a giant asterisk on all of it. Wait until July 15. By that time, we have a lot of questions answered, and we will be getting the June existing home sales report soon after that.That was the advice of HousingWire’s housing data analyst, Logan Mohtashami, in April. Mohtashami has long believed that the housing market would see a strong recovery between 2020 through 2024. This is because, based on his model, the state of the housing market is dependent on demographics and mortgage rates and this timeframe would bring with it demographics that are favorable for the housing market.Mohtashami chose to stand by his model during the coronavirus and told other experts to wait until July 15 to see how things will play out with the real estate market. Based on the data, he believes that it’s time that the talk of a housing bubble crash ends. Even with the COVID-19 pandemic, many other events would have to take place in order for us to see a market crash in 2020 such as:Fear of COVID-19 gets way out of handSellers would desperately try to get rid of their homes; at the same time, there would be no demand for homes for saleThe government would place more restrictions on lendingAs none of these events have come to fruition, it’s unlikely that we will see a housing crash in the second half of 2020.What the Housing Market Data SaysMohtashami accompanies his theory with the following data:Purchase application data from the Mortgage Banking Association has shown YoY increases over the past 7 weeks (+18%, +13%, +21%, +18%, +15%, +33%, +16%)Pending home sales saw a rise of 44% month-over-monthNew home purchase applications were up 54% YoYAll of this data points to the fact that the US housing market is actually in an upswing. Although existing-home sales have not reached full recovery, the market, in general, is experiencing a V-shaped recovery.Mohtashami’s final verdict:As long as purchase application data stays flat to positive on a year-over-year basis, housing will be fine in 2020. We have a lot of work left to do in this country. In the meantime, let go of the bubble crash thesis, because the reality is it wasn’t going to happen in 2020, even with a pandemic.Learn more about why a housing market crash is not likely in 2020 by watching Mashvisor’s video:Sign up now to Mashvisor to stay updated on real estate news around the US. For more on the effect of the coronavirus on the real estate market, click here. Start Your Investment Property Search! START FREE TRIAL 0FacebookTwitterGoogle +PinterestLinkedin Sylvia ShalhoutSylvia is the Content Marketing Manager at Mashvisor. As a real estate writer, she has been covering topics for the beginner and advanced real estate investor, helping them make smarter decisions as well as real estate agents looking to take their business to the next level. Previous Post The Seller’s Guide to Negotiating Real Estate Commission Next Post Best Eastern States to Invest In in 2020 Related Posts US Home Prices to Hold Steady Despite Pandemic Invest in Real Estate Amid Stock Market Plunges Report: Property Prices Are Still Rising in These 10 US Cities Airbnb New York City Settlement Over Host Data Apartment Occupancy Rates Reach 20-Year High The Most Affordable Housing Markets Q4 2019 Mansion Tax Causes NYC Real Estate Sales to Drop US Home Prices Expected to Fall 6.6% by 2021 Data Shows the US Housing Market Is Heating Up Forecast: A W-Shaped US Housing Market Recovery The First YOY Decrease in Real Estate Prices in Years How the Wildfires Will Affect California Real Estate Investors