The news has been full of articles forecasting a crash in home prices. Mortgage rates have roughly doubled since this time last year which has kept many buyers out of the market. Fewer buyers means less demand and less upward pressure on prices and significantly slowed the number of purchases. So, the talking heads are quick to predict a housing crash is just around the corner. (Some have been predicting a crash since 2017 – it makes good headlines.)
I don’t think we will see a crash any time soon, if ever. Why? While there is definitely less demand, there is still insufficient supply of homes to meet the number of people looking for their first home. The number of people who are at the “prime home buying age” has been steadily increasing. And, new homes are not being built in enough quantity. Additionally, sellers of existing homes are holding off. The high rates would make the mortgage on their replacement home very expensive, too.
The limited supply of homes, even with lower demand, puts a safety net under the market. Prices in some areas may come down a bit (more in the “hot” markets), but the conditions are simply not there for a 2008-style crash. If you are waiting for housing prices to crash and then grab a good deal, you are likely to be disappointed.
With fewer buyers, there are opportunities to find a home right now without a lot of competition. Even though rates have gone up a lot, they have been coming down in recent weeks, and I predict this trend will continue. And, as rates come down there will be more buyers, once more, chasing after the limited supply of homes. This could cause prices to stabilize and possibly increase by yearend.
This is a perfect time to re-engage in a home search. By spring, the traditional start of the home-buying surge, you might find a lot of other buyers in the market for the home you want.
If you would like to see whether you are qualified for a purchase now, please give me a call. I’m happy to help friends and family, too. There are a number of programs that can make a home more affordable. We can go over the best options for you. Real estate has always been a long-term way to build a solid financial future.
We can get you a loan in California, Florida or Texas. Reverse mortgages too.
Disclaimer: This is my opinion from the data I have examined, but is not intended as financial advice. If you are looking to purchase a property, I would encourage you to work with a professional real estate agent in your area. I can recommend several to you