California is the top housing market in the country, but people in the Golden State seem to be worried about a housing crash — at least judging from the surge of Google searches.
In May, Californians searched online about housing at a collective pace 69 percent above the 17-year average. Housing searches were at the highest level since the mid-bubble-bursting days of 2007, The Orange County Register reported.
The searches nearly triple the pre-coronavirus search concerns of 2015-to-2019.
The searches revolved around four key housing terms — “housing bubble,” “housing crash,” “home prices,” and “housing market”
Across the board, U.S. searches for these key terms were 107 percent above average in May, the 10th highest level on record. California had the highest number of searches.
According to indicators, the housing boom is cooling as weekly mortgage demand drops.
The average interest rate for 30-year fixed-rate mortgages decreased to 3.17 percent from 3.18 percent recently.
“Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continue to hold back purchase activity,” said Joel Kan, a Mortgage Bankers Association economist.
Applications for a mortgage to buy a home dropped 3 percent and were 2 percent lower than a year ago, CNBC reported.
Despite fears of the housing market bubble bursting, some experts say it’s not going to happen.
The housing market will “continue to make new highs for the next three years in a row with on-average high single-digit YoY (year-over-year) gains,” predicted the Financial Samurai.
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Looking at the desirable Sacramento, California, housing market, Sacramento-area wholesale mortgage lender Shelby Elias with United Wholesale Lending, told KCRA, “It won’t stay hot forever. But right now, there are not enough new homes being built to replenish the supply needed to meet the demand. A crash could be caused by a bubble of people not being able to afford the homes. It also might occur when the price to build a home is so much higher than the price to buy a resale home. I don’t see a crash coming. There may be a slight correction coming, but nothing is indicating a crash at this time.”
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