Is the Housing Market About to Crash?! Nope.

A lot of discussions about the future of the housing market is taking place right now, especially when it comes to whether or not a crash is on the horizon. Thankfully, based on current data and historic trends, it looks like market is most definitely not heading towards a crash. Here’s why:

What is a Housing Market Crash

A housing market crash is when the value of homes drops very sharply and quickly. This then leads to many homes being sold for less than they are actually worth, and this results in a huge increase in foreclosures, a large decrease in home sales and mass confusion across the housing industry.

Supply and Demand and the Housing Market Crash

The last big housing market crash was back in 2008, and one of the main causes of this was too many homes on the market.

Based on the current data/trends of today’s housing market we are not trending in that direction. In fact, we are on the opposite end with the demand of homes being much higher than what is currently available. And when this happens home prices continue to remain high, or even increase based on competition—and this is the opposite of a housing market crash.

Unemployment and the Housing Market

The unemployment rate has a big impact on the housing market. If more people are unemployed and not able to make money this means that they aren’t paying their mortgages, rent and other bills. Back in 2008, our economy saw some of the highest unemployment rates around 8%. This was a big factor in the crash of the housing market with many homeowners going into debt and foreclosures.

Today’s unemployment rate is around 4% which is much lower than during the crash of 2008. This is another indication that a housing market crash is not in our immediate future.

Be Encouraged to Buy and Sell

Overall, the housing market is working towards balancing itself out. There are many factors that will impact it in the year ahead—the Presidential election, inflation, interest rate changes, etc. However, if COVID taught us anything it’s that we are resilient and though we may miss the 3% interest rates, we are once again finding acceptance and understanding in the way the new housing market works.

Buyers and sellers should be encouraged to take advantage of “today’s” market and work with expert real estate agents and lenders to help them navigate current trends and be able to find their dream home. One thing is for sure, the threat of a housing crash that isn’t very warranted should definitely not deter anyone from enjoying their next chapter in homeownership.

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