by Calculated Risk on 10/27/2021 03:47:00 PM

The headline below "No one seems worried ... Just like last time the bubble burst" applies to government officials in the Bush administration and at the Fed (although there was some concern at the Fed, notably from Dr. Janet Yellen). Plenty of private forecasters were expressing concern in 2005 like Dean Baker (for example, see my post Speculation is the Key in early 2005).

Chris Isidore writes at CNN: No one seems worried about a housing bubble. Just like last time the bubble burst.

CR take: There is agreement that underwriting standards are much better today than during the bubble (although I'm a little concern about some non-QM loans, and FHA loans are always a little risky - but nothing like the insanity during the housing bubble).  And also, if prices do fall, there is agreement we won't be cascading price declines like during the housing bust.

Here are some interesting quotes from the article:

"I don't think we'll see prices fall 20% to 30% once again," said Dean Baker, senior economist and co-founder of the Center for Economic Policy and Research. "I don't think there's that kind of story out there." But he cautioned that even a modest rise in interest rates could lead home prices to slide between 5% and 8%.

And from Mark Zandi:

"The housing market is out of whack. It's not sustainable. It is overvalued, stretched and vulnerable as [mortgage] rates rise, and affordability gets crushed," he said. "But I'm not concerned we're going to have a crash."

And from Ivy Zelman:

Zelman doesn't believe there will be another collapse in housing prices like the last time. She said that a rise in the 30-year fixed rate mortgage from the current 2.9% to about 4% could be enough to send prices lower. "A lot of what we're seeing is scary," she said. "We don't know what will happen with interest rates."