Rising housing and commodity prices are largely due to inflation

Often times in this group I see people on the sidelines waiting for some kind of housing crash saying the market is in a bubble.

Sometimes they even compare this market to 2008 just because the similarity that the housing market is in utter chaos.

The housing collapse of 2008 was because of a major systematic issue. Everyone and their dog (literally) Could get a mortgage even if they couldn't afford it.

During 2020 and 2021 some aspects are the same. The market is insane right now and housing prices have been going higher, often times significantly..

My theory on the reason for this major increase in home prices is that it is a result of inflation. Some people may say it's because of a housing shortage with many more buyers then sellers.

It is true that there is a lack of inventory and tons of buyers on the market. It is my proposition that this is because of inflation.

When you increase the amount of dollars in circulation by over 30% and distribute it throughout the Country Via Different government programs inflation is bound to happen.

Since it's a fact that the money supply has increased significantly and that trillions of dollars were deposited into individuals and businesses bank accounts nearly everyone has more money than they would have without these government programs (obviously)

If on average, Everyone has more money but the same amount of houses are on the market housing prices are bound to increase. The housing shortage may be largely due to inflation in this regard.

Other people may say the reason for the housing boom is because of the record low interest rates. Which also play a large factor in the equation.

With record low interest rates and record amounts of dollars circulating throughout the economy commodity prices increasing and inflation is bound to happen.

The number of dollars circulating throughout the economy isn't going to go down. In fact they are still printing and distributing money through numerous government programs.

In my opinion there is absolutely zero reason for any kind of housing crash to occur. And even a decline of 5 to 10% I find highly unrealistic at this point.

Does anyone have an argument as to why the housing market would crash or decline significantly? Rising interest rates Might be a factor, but at this point I think the damage has been done.

I see numerous reasons why the trend would continue and very few reasons why there would be any kind of decline much less some kind of market crash.

Does anybody have a valid argument explaining why there would be a housing crash or correction in housing prices. I'm interested in What arguments people on the other side of this debate may have.

submitted by /u/Qppaid14
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source https://www.reddit.com/r/RealEstate/comments/n27cov/rising_housing_and_commodity_prices_are_largely/