Five Reasons Why There Won’t Be a Housing Crash Soon

Logan Mohtashami at Housing Wire is on my favorite reads every week. Here are his 3 reasons why housing will not crash in 2021 or anytime soon-
We would need a lot of forced selling and foreclosures and short sales. However, our new President has proposed extending the national moratorium on foreclosures until September 2021. And this "deadline" could easily be extended again and again.
We would need demand for existing home sales to drop below 4 million from the current pace of nearly 6 million. Logan also pointed out that at the end of 2005 the Mortgage Purchase Application Index peaked at over 500 as Euphoria for housing swept over the country. Currently we are at about 340. Next, the years 2020-2024 have the BEST demographics for housing ever recorded with millions of Millennials buying homes as they get older. Further, we have the lowest mortgage rates on record to spur demand higher.
Third, we need much tighter credit standards to shut out a lot of traditional homebuyers. However, credit today and for the last 10 years has been much tighter than it was 15 years ago and yet we may sell 6 million existing homes this year.
I would add 2 more reasons. First, is months of inventory as we have only witnessed home priced drop in Denver when months of inventory exceeded 6 months. We are currently at a ½ month of inventory; thus inventory levels need to increase by 1200% for this to happen. If you believe this will happen soon I have swamp land in the Arizona desert to sell you.

Second, home builders have been falling behind in building new homes since 2011 and I now believe that home builders in metro Denver will never ever catch up with the backlog in demand for new homes. For this to happen we would need our local governments commit to reducing the costs of new construction by way of cheaper permits and less intrusive housing codes. This ain't going to happen. We also need hundreds of thousands of young adults to enter the construction industry instead of going to college or working in restaurants, retail, and hospitality. I don't see this happening either.