The housing boom is not a bubble—but prices are likely to fall when interest rates rise. The real consequences in terms of employment and widespread recession will not come as they did in the Great Recession, but many home buyers will be disappointed with the prices they have paid in the years to come.

Home prices appreciated by four to five percent per year from 2013 through the first half of 2020. This was a fairly stable era for the economy and interest rates, but with decelerating population growth. (Population helps drive demand for housing.) In the summer of 2020, though, housing prices began accelerating.