The other thing that people forget is that real estate is a pretty good place to invest in inflationary environments. It is a traditional store of value. And there are some demographic factors that might push housing higher—a lot higher. Only 48.6% of millennials own homes, 20% less than Generation X. Like the baby boomers, the millennials are a huge demographic bulge, and they’re not done buying. Sometimes I wonder if housing will do over the next decade what Canadian housing did over the last, which is continue to rise despite the odds.

Let’s not get sucked into a vortex of housing doom. I promise it’s going to be okay. I predict we will have a small correction in prices of about 10% with limited fallout, and then the housing market will resume its march higher.

Jared Dillian is the editor and publisher of the Daily Dirtnap. An investment strategist at Mauldin Economics, he is author of All the Evil of This World. He may have a stake in the areas he writes about.

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