A bubble in the housing market occurs when, after watching housing prices rise for several years, house buyers come to believe that:

A) housing prices will eventually fall.
B) housing prices will continue to rise.
C) the housing market could be a risky investment.
D) the price increases cannot be explained, and uncertainly drives them out of the market.

Housing Market

The market segment covering the buying, selling, and renting of residential properties.

Housing Prices

The amount of money required to purchase residential properties, reflecting both the demand for and the supply of homes.

Bubble

An increase in the price of a good based not on the fundamentals of demand or value, but instead on a belief that the price will keep going up.