Home-Buying Panic Sets in, Housing Bubble 2 Soars, Industry Drools, But It’s Doomed, Says Zillow

Wolf Street reports:

“For more than 30 years, consistently falling mortgage interest rates have helped spur more home sales. But in about a year’s time, that decades-long tailwind will likely shift to a housing headwind.” Sales will be hit hard, according to a worried analysis from Zillow.

But not yet.

Home sales have been hot, by post-Financial Crisis standards. According to the National Association of Realtors, sales of new homes rose to a seasonally adjusted annual rate of 546,000 in May, fastest pace since February 2008. The pending home sales index hit the highest level since April 2006. Existing home sales rose 9.2% from a year ago to a seasonally adjusted annual rate of 5.35 million, the fastest pace since November 2009. And the median price of existing homes jumped 7.9% to $228,700, the highest since 2006.

The median home price had hit the all-time crazy peak of $230,000 in 2006, during the insane Housing Bubble that had such dramatic consequences when it imploded. So in May, the median price was almost back where it had been during that all-time crazy peak in 2006. Just $1,300 off!

Artificially low interest rates mean overpriced real estate: just a reminder.