The Decade-Long Housing Boom: Why Home Prices Won't Stop Rising Until 2035
Download MP3Episode Description
Is it a good time to buy a house with prices having gone up so much? Are we in a bubble or is this the new reality? In this episode, we break down why this housing boom is different from 2008 and explore the compelling evidence that we're only in the "first inning" of a 10-year housing bull market.
Key Points Discussed
- This is NOT a bubble like 2008 - Current market conditions are fundamentally different from the previous housing crisis
- We're in the "first inning" of a 10-year housing boom - According to Investor Place publication, this boom only started within the last year
- Historical context matters - Previous housing booms typically last a decade; even the 2008 crash boom started around 2000 and lasted 8 years
- Dramatic price increases continue - U.S. home prices rose 20% in one year and have increased 10% for ten straight months
- Key differences from 2008 crisis:
- Mortgage rates are historically low (3% today vs 7% in 2000s)
- No greedy banks giving out bad loans or "liar loans"
- Market driven by legitimate demographic demand, not risky financing
- Millennials are supercharging the market - This generation now accounts for over half of all home purchases after being out of the market for years
- Massive supply constraints - Housing supply has a 7-8 year lead time, and builders were hesitant to build for years after 2008
- Industry needs 2 million housing starts per year for a decade - Currently building less than 1 million houses annually
- COVID changed home importance - Revitalized view of home importance as primary place for work, entertainment, and daily life
Real-World Examples
- Case study: Healthcare tech couple initially looking for $400K house ended up buying $600K home - over 50% increase from original budget
- Investment strategy example: $200K house with 5% down payment ($10K) results in monthly payment around $1,000-$1,500 including taxes and insurance
Strategic Advice
- Buy now, even if it's not your forever home - Get into the market to catch the wave of appreciation
- Equity building strategy - A $200K house increasing to $250K creates $50K equity for future home purchases
- Lower-priced homes are safer investments - $200K-$250K homes have consistent market demand and easier resale
- Avoid the McMansion trap - Higher-priced, poorly built homes were most affected in the 2008 crash
- Timeline consideration - Live in starter home for 3-4 years to build equity before buying forever home
Market Outlook
- Supply shortage will persist - Takes years to resolve underbuilt housing situation
- Demographic trends supporting demand - Millennials settling down and putting down roots
- Different from 2008 - Current boom based on real demand and demographic shifts, not risky lending practices
- Long-term perspective - This housing boom expected to continue for approximately 10 years
