We are floating high in a real estate bubble as home prices continue to soar rapidly. This bubble is caused by an increase in demand for housing and a limited supply to choose from. The result is homes being bought and sold for amounts significantly higher than the property is worth.
The United States last saw such a bubble from 2005 to 2008 before a series of delinquent mortgages caused the whole thing to burst. Fannie Mae estimates home prices will continue to rise 10.8% in 2022.
While not owning real estate on your own, investments may include residential real estate in rental properties or house flipping. There's also the option to purchase commercial properties for long-term rental income.
Real estate investment trusts, also known as REITs, offer a diversified portfolio of properties through investments in particular stocks. These companies mainly pursue commercial real estate but may also purchase large-scale residential properties.