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Housing Guru Sees Soft Landing

Washington — Hampered by higher interest rates and high housing prices, the housing market may be cooling off, but it's not a bubble about to burst, said David Lereah, chief economist of the National Association of Realtors.

Drawing a vivid picture, Lereah said, “Today's housing market is more like a balloon than a bubble. Balloons don't burst.”

Extending the analogy, Lereah went on, “You can put air in a balloon and it expands or you can take air out and it shrinks. Various metro markets got real hot over the last four years. Air went into those balloons and the prices went up. But now, air is coming out of the balloons. We're hearing a hissing sound, not a pop. There's a soft landing ahead.”

Finding a silver lining, Lereah said, “Sellers' markets are transitioning to buyers' markets. As inventories rise, prices soften somewhat, many buyers get the break they've been waiting for and are able to get into the market.”

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