The Housing Market: Dead or Hibernating?

The Housing Market: Dead or Hibernating? by Brad McMillan, Commonwealth Financial Network

Lately, I've been reading that the housing market, having largely recovered from the financial crisis, is now set to stay dormant. Much of this argument seems to be based on the last couple of months, when housing has indeed been hibernating.

But I suspect we haven’t seen the end of the housing boom.

It’s a question of supply and demand

Supply of housing is quite low, relative to demand, and demand is rising. We’ll get to demand in a minute, but first let’s look at the following chart, which shows the months’ supply of new houses—how many months it would take to sell the existing inventory—and compares it with prices.