The term “housing bubble” is tossed around regularly these days – and not entirely without cause. Over the past year we have seen meteoric gains in housing prices and witnessed bidding wars on homes for sale. The leading measure of U.S. housing prices, the S&P CoreLogic Case-Shiller Index, reported a 10.4% annual home price increase for 2020. And it has been reported that roughly two-thirds of the people who bought a home in 2020 made an offer without actually stepping into the home and relying instead on video tours.

Despite (or perhaps because of) these trends, there are concerns that an over-exuberant housing market could be threatened by credit risks, unrealistic valuations, sharply rising interest rates or other problems.

Indeed, due to the COVID-19 pandemic and related job losses, about 2.6 million homeowners are currently enrolled in some type of forbearance program, according to recent data

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