Economists Warn of Potential Housing Bubble as Home Prices and Mortgages Rise

On Tuesday, the Federal Reserve Bank of Dallas warned of a potential housing bubble fueled by investor speculation on top of pre-existing inflation. 

Bubble or not, finding a place to live is getting more expensive, and not just in the U.S. The Dallas Fed report also pointed to hot housing markets in 11 other countries, including Canada, South Korea and several European nations. 

Coverage of rising housing prices has been ongoing since the start of the pandemic, but recent developments have stirred additional concerns. A Tuesday report of the S&P CoreLogic Case-Shiller Index said home prices rose 19.2% in the 12 months ending in January. Another report from Realtor.com said the median home price in the U.S. was a record $405,000 in March 2022 — 26.5% higher than in March 2020. Furthermore, average mortgage rates have spiked from 3% in late 2021 to 4.42%, a level not seen since early 2019. 

Coverage was widespread but most prominent in business outlets. Opinions on the existence of a housing bubble were generally mixed across the spectrum, with several voices discussing how today's trends differed from the 2008 financial crisis. Some coverage in right-rated outlets singled out California; a Fox Business (Lean Right) said the state’s high housing prices were “not so surprising.”