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Rising home prices and recession memories have convinced some buyers that a bubble will pop and prices will drop. But it\u2019s just too much demand and too little supply.<\/span><\/span><\/p>\n<\/div>\n NEW YORK \u2013 The U.S. housing market is on a hot streak with double-digit annual gains in home prices, bidding wars and surging buyer demand. That type of soaring housing market is prompting more \u201cbubble\u201d fears in some corners, but economists say the housing market isn\u2019t getting overinflated. A bubble won\u2019t pop, thousands of homes won\u2019t slide into foreclosure, and buyers who wait likely won\u2019t be better off.<\/span><\/span><\/p>\n \u201cWe have strong conviction that we are not experiencing a bubble in U.S. housing,\u201d Vishwanath Tirupattur, a Morgan Stanley strategist, wrote in a note to clients this week.<\/span><\/span><\/p>\n Lawrence Yun, chief economist of the National Association of Realtors\u00ae, agrees. He told Axios last month: \u201cThis is not a bubble. It is simply lack of supply.\u201d<\/span><\/span><\/p>\n The rapid rise in prices may be concerning to home shoppers, however. The median selling price for a home is up $35,000 compared to a year ago, which is the fastest-paced increase since 2006, Tirupattur says.<\/span><\/span><\/p>\n But this isn\u2019t 2006. Housing inventories are low, credit remains tight, and lenders aren\u2019t issuing risky loans like they did back then. Product risk \u2013 such as from mortgages with introductory periods, teaser rates or balloon payments \u2013 comprised about 40% of the mortgage market between 2004 to 2006. Those factors are now at only 2% of the mortgage market, according to Morgan Stanley.<\/span><\/span><\/p>\n Also, the housing market has a record low number of homes available for sale, in part likely caused by the pandemic. At the end of March, there were 1.07 million homes available for sale, according to NAR data. For comparison, during the housing bubble, in July 2007, there were more than four times that \u2013 4 million homes available for sale.<\/span><\/span><\/p>\n Still, while home prices won\u2019t keep climbing at the current pace, they aren\u2019t expected to fall either, economists say.<\/span><\/span><\/p>\n \u201cWe are not at all suggesting that home price appreciation will maintain its current torrid pace,\u201d Tirupattur writes. \u201cHome prices will continue to rise, but more gradually.\u201d<\/span><\/span><\/p>\n\n