Federal Reserve Governor Christopher Waller has no doubt about how competitive today’s housing market is.
“Trust me, I know it is red hot because I am trying to buy a house here in Washington and the market is crazy,” Waller said in a speech at a housing conference.
But even as home and rental prices have soared over the past couple years, he is not concerned that the housing market is poised for a repeat of the crash that occurred in the mid-2000s and ultimately triggered the Great Recession.
His reasoning has to do with the forces that are contributing to the run-up in housing costs. “My short answer is that unlike the housing bubble and crash of mid 2000s, the recent increase seems to be sustained by the substantive supply and demand issues,” he said, and “not by excessive leverage, looser underwriting standards or financial speculation.”