Slowing home price appreciation is not an indication that the U.S. housing market is facing a bubble that will burst as it had during the financial crisis of the late 2000s, a Standard & Poor report said.
Home price growth is expected to gradually normalize, rather than suddenly correct itself.
“There are similarities between the current pattern of home price appreciation and the 2004–2006 experience,” S&P said. “However, differences in the fundamental drivers of home price appreciation then and now suggest the current environment is a healthier one than the housing bubble that preceded the Great Financial Crisis.”
Back in September 2005, S&P CoreLogic Case-Shiller National Home Price Index had a then-record year-over-year increase of 14.4%. It was surpassed this April when the annual change was 15%.
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