Will The Real Estate Bubble Burst In 2014? Loan Love Provides Answers

June 11, 2014

SAN DIEGO, June 11, 2014 /PRNewswire-iReach/ — LoanLove.com is a borrower advice website that is dedicated to keeping new home buyers and experienced home owners updated on current news and events which could affect their home loan options or their home ownership experience. “Will the real estate bubble burst in 2014?” is a question many loan borrowers are asking nowadays. With home prices shifting as 2014 rolls by, economists fear for the worse. Loan Love’s latest article titled “Housing Bubble Burst In 2014? (The Possibility Is Very Real)” discusses the possibility of a bubble burst this year while addressing the reasons behind it.

The article first opens up by indicating the state of the housing market: “While many in the real estate, home lending and related sectors have celebrated the slow, but steady, progress of the housing market, there remains a segment of economists who are not nearly so optimistic. These experts believe a housing bubble burst in 2014, or soon thereafter, is very likely.

A bubble in the housing market occurs when home prices rise at a rate well beyond the rate of inflation and the rate of increase in rental rates.” The article also mentions that even with signs that the housing market may be making a recovery ever since 18 months ago, there are other signs that points to a burst in the housing bubble being unavoidable this year. The article elaborates further on this with the following:

“Year-over-year price increases could signal another housing bubble, warn some economists. Home prices jumped upward in 119 out of 164 major metro areas the final quarter of 2013, according to the National Association of Realtors.

Rising home prices may seem to be the sign of a recovering and prosperous market, but there is a small group of economic analysts pointing to the current situation as even stronger evidence that a housing bubble is about to burst, particularly since interest rates are supposed to rise considerably higher throughout 2015. The same scenario with rising interest rates occurred throughout the years leading up to the last big burst in 2008.

One of their biggest concerns is that first-time home buyers are being priced out of the market. First-time buyers are essential to sustaining a healthy housing market because they provide a pool of buyers for those wishing to sell their home and upgrade to a new one of greater value. Without a strong supply of first-time buyers, existing home owners will have difficulty selling their home or even reaching qualified buyers.”

Economists also agree that the circumstances of the housing bubble burst being a possibility is due to a combination of lackluster improvements in the unemployment rate as well as new investors will to pay for rental homes well above the list price. This only spells bad news for loan borrowers considering today’s stricter loan requirements. Although the housing market have not reached dangerous levels as of the moment, the Loan Love article warns that if housing prices continue to rise higher than rental rates and the pace of inflation, the likelihood of housing bubble burst may be big possibility in the future.

To learn more on the real estate bubble burst in 2014, please visit LoanLove.com to read the complete article.

Media Contact: Kevin Blue, LoanLove.com, 949-292-8401, contact@loanlove.com

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SOURCE LoanLove.com

Source: PR Newswire

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