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Business Economics

, Volume 40, Issue 2, pp 29–35 | Cite as

There is No Housing Bubble in the USA

Housing Activity will Remain at High Levels in 2005 and Beyond
  • James F Smith
Article

Abstract

There is no evidence of a housing “bubble” in the United States and housing demand should stay strong for years to come. Three major factors lead to this conclusion. First, the 77 million baby boomers are approaching the peak home ownership ages of 65-75 (over 83.0 percent versus a national average in 2004 of 69.0 percent). Second, immigrants, a growing share of the U.S. population, tend to buy houses ten years later than people born in the United States of the same income group and family size. Third, mortgage rates are not likely to go high enough (8.0 percent or more for 30-year fixed rate mortgages) to put a crimp in demand. Despite some areas of concern, overall homeowners' equity is at record levels above $9 trillion. Delinquencies are still less than one percent of mortgages outstanding.

Keywords

real estate housing bubble prices 

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Copyright information

© National Association for Business Economics 2005

Authors and Affiliations

  • James F Smith
    • 1
  1. 1.Society of Office and Industrial Realtors

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