Chris Isidore writes at CNN: No one seems worried about a housing bubble. Just like last time the bubble burst.
“I don’t think we’ll see prices fall 20% to 30% once again,” said Dean Baker, senior economist and co-founder of the Center for Economic Policy and Research. “I don’t think there’s that kind of story out there.” But he cautioned that even a modest rise in interest rates could lead home prices to slide between 5% and 8%.
And from Mark Zandi:
“The housing market is out of whack. It’s not sustainable. It is overvalued, stretched and vulnerable as [mortgage] rates rise, and affordability gets crushed,” he said. “But I’m not concerned we’re going to have a crash.”
And from Ivy Zelman:
Zelman doesn’t believe there will be another collapse in housing prices like the last time. She said that a rise in the 30-year fixed rate mortgage from the current 2.9% to about 4% could be enough to send prices lower. “A lot of what we’re seeing is scary,” she said. “We don’t know what will happen with interest rates.”