Can Google Trends Predict the Next Housing Bubble?
Google Trends provides a convenient window for real estate consumers to know their interests and concerns. And at this point, the potential housing bubble seems to be the biggest concern. Specifically, Google Trends shows that the search for the term housing bubble has been relatively constant for the past five years, even declining early in the coronavirus pandemic. But this spring, the search for term housing bubble surged
Spike for the term “housing bubble”
The spikes occurred especially in late March. Part of the surge simply reflects that more Boston condo buyers were looking while preparing to enter the market, as it was more or less in line with the beginning of the spring housing market. On the other hand, the search for the housing bubble hasn’t seen a similar surge in the last few years, so something unique must be happening here.
In addition, the surge seems to be in line with the release of a report from the Federal Reserve Bank of Dallas and media coverage of a report pointing out the unusual movements of the US housing market for the first time since the boom in the early 2000s. It found evidence of the brewing of the US housing bubble
Another thing that happened almost at the same time as people were doing more bubble-related Google searches was a sharp rise in mortgage rates. According to Freddie Mac, the average interest rate on a 30-year fixed-rate mortgage on March 3 was 3.76 percent. By March 31, the average had jumped to 4.67 percent. After that, the average continued to rise until May.
It’s not clear if there is a direct link between the rate of increase and the soaring Google search for bubble-related topics. The only thing I can say clearly is that both things happened at the same time. Still, it’s easy to imagine that buyers suddenly feel the pressure of rising…