Housing Market Crash or Not?
Many people are wondering if the U.S. is headed into a recession and if the real estate market is showing signs of being like 2008. However, data is not showing the market crashing at this time! In this blog post, we will dive into factors of the housing market and data to give you an idea on housing predictions by experts!
Factor 1: Inventory
One key factor to the housing market is inventory. Right now, we still have an undersupply of inventory in the U.S. and for the market to crash there would actually need to be an oversupply and influx of sellers wanting to put their home on the market, which numbers don’t support happening. Keeping Current Matters, a real estate blog site, shows in this graphic the inventory levels as of August 19th 2022.
Factor 2: New Home Builds
- Another factor in the housing market that can affect whether or not a crash is on the horizon is new builds. When too many new homes are being built, that ups the inventory and can cause prices to crash. However, many new builders are slowing their production levels and are saying the market is competitive right now due to higher mortgage rates halting home buyers from purchasing. Builders are keeping an eye on how the market is doing and getting creative with enticing buyers again.
Factor 3: Distressed Properties
- The last factor that many experts use to predict housing market crashes, is distressed properties like foreclosures and short sales. When the market crashed back in 2008, it was due to people buying homes they truly couldn’t afford. Lender’s have tighter restrictions on giving mortgages to home buyers now which helps keep so many of these distressed properties from being on the market. Below you can see a graphic about the foreclosure activity from 2005-2021. At the time of the last market crash, there were over 2 million foreclosure/short sales. Plus, the new program for forbearance helps buyers with deferred payments and modifications that other home buyers before weren’t able to capitalize on.
Although the market is changing and there are some fears of the unknown, rest assured that as of right now, the market levels aren’t anywhere near where they were during the last market crash! There are still many home buyers searching for their dream home and people using equity from selling their home when the market was super hot just a few months ago!
Are you an agent looking for some support? We are able to help you with all the tedious tasks of keeping track of timelines, paperwork and dates. Plus, we only charge you for transactions under contract once it’s closed. Click below to get started today!!