Latest NewsTwo Reasons Why Today’s Housing Market Isn’t a BubbleSunday, 03 July 2022

 

You may be reading headlines and hearing talk about a potential housing bubble or a crash, but it’s important to understand that the data and expert opinions tell a different story. A recent survey asked over one hundred housing market experts and real estate economists if they believe the housing market is in a bubble. The results indicate most experts don’t think that’s the case :

If you’re concerned a crash may be coming, here’s a deep dive into those two key factors that should help ease your concerns.

 

1. Low Housing Inventory Is Causing Home Prices To Rise
The supply of homes available for sale needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued price appreciation.

Stock on market is nothing like before. Prices are rising because there’s a healthy demand for homeownership at the same time there’s a limited supply of homes for were previously

 

2. Mortgage Lending Standards Today have improved significantly.

Previously, it was much easier to get a mortgage than it is today and tighter lending criteria means more control and less chances of default. 
Purchasers who acquired a mortgage over the last decade are much more qualified than they were in the years leading up to the last downturn. In short, “. . . Lenders are giving mortgages only to the most qualified borrowers. These buyers are less likely to wind up in foreclosure.”

Bottom Line

A majority of experts agree we’re not in a housing bubble. That’s because home price growth is backed by strong housing market fundamentals and lending standards are much tighter today. If you have questions, connect with one of our friendly Max Walls Sales staff for a confidential chat.

 

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