Housing Bubble

A housing bubble occurs when home prices rise rapidly beyond their actual value, driven by excessive demand and speculative buying. This can happen due to low interest rates, easy credit, and investor enthusiasm. As prices soar, more buyers enter the market, believing prices will continue to increase. Eventually, the bubble bursts when prices become unsustainable, leading to a sharp decline in home values. This can result in financial losses for homeowners and investors, as well as broader economic issues, including foreclosures and reduced consumer spending. Recognizing the signs of a bubble can help in making informed real estate decisions.