“Rising inflation and interest rates have cooled off the red-hot housing market, and many Americans wonder what will come next.
One thing is certain — it’s a market the likes of which we haven’t seen before.
In a typical real-estate cycle, four phases occur: expansion, hyper supply, recession and recovery. But hyper supply is missing from the equation this time — and it’s thrown the entire cycle for a loop.
“In the typical narrative the ‘hyper supply’ is because construction companies over-build, and there becomes a glut of housing units,” Todd Metcalf, the senior economist at Moody’s Analytics, told Insider. “This occurred during the housing bubble preceding the Great Recession. However, at the national level we still see a severe housing shortage.”.
