It’s been a decade since the onslaught of the Great Recession, and the housing market has healed and changed drastically since then.

Home prices in many markets have hit record highs—beating their prerecession levels—and foreclosure rates are historically low, according to the National Association of Realtors®. Stronger lending and regulatory reforms in recent years also have prevented the formation of another housing bubble, says NAR Chief Economist Lawrence Yun. 

“Over the past 10 years, prudent policy reforms and consumer protections have strengthened lending standards and eliminated loose credit, as evidenced by the higher-than-normal credit scores of those who are able to obtain a mortgage and near record-low defaults and foreclosures, which contributed to the last recession,” Yun says. “Today, even as interest rates begin to increase and home sales decline in some markets, the most significant challenges facing the housing market stem from insufficient inventory and accompanying unsustainable home price increases.” 

Though inventory shortages continue to plague many housing markets, Yun believes some of the nation’s most overheated will see sales slow down. Many of these markets are experiencing rising prices because of insufficient supply, not due to weak buyer demand, he says. New construction rose 7.2 percent year over year in July, but Yun says that even more is needed to fill national shortages. Yun forecasts that existing-home sales will increase 2 percent in 2019, and home prices will rise by 3.5 percent. 

Source: National Association of Realtors®