Housing prices were pretty strong at least in the first half of 2018. Now they're falling, and that could be really good news.
"I think the housing market is fantastic -- it's absolutely wonderful," Chief Economist at LendingTree Tendayi Kapfidze said. He added, "it's certainly what we need to be happening in the housing market."
Housing prices were growing at around 6% to 7% year-over-year in the first two quarters of 2018, a relatively strong growth rate. The baby boomer generation, a demographic that holds a higher percentage of houses in the country compared to other demographics, has been slow to sell their properties, which restricts supply, and brings prices up, according to Deutsche Bank economist Brett Ryan.
Keeping an eye on excesses in the market is important. "We got into the excesses in 2005 and 2006 and 2007, and that created a lot of problems for us late in that decade," Kapfidze said. He added, "I think this is the perfect time for housing to take a breather -- let's let wages and income catch up a little bit, and hopefully we don't create the types of excesses we saw the last decade."
"If housing wasn't slowing down, it would men that the rate hikes were not working," he concluded.