Are We Headed Towards Another Housing Crash?
As your local real estate professionals, we’ve been fascinated by the market over the past few years. Of course, many circumstances led us to where we are today: a market characterized by high mortgage rates, stricter parameters for securing a loan, and limited housing supply that’s made it a seller’s market for quite some time. Knowing that the market is cyclical, many people have wondered if we’re heading towards another crash of the housing market, similar to what we saw in 2008.
No one knows for sure, but the experts, ourselves included, don’t believe so, and here’s why.
It’s Harder to Get a Loan
The classic American dream often includes homeownership, so the government sought to make this dream more achievable by sponsoring lenders such as Fannie Mae and Freddie Mac back in 1999. On paper, that was a good and noble thing, but what wound up being one of the major factors in why the market crashed.
Now, lenders are subjecting would-be homeowners to stricter standards, meaning those with loans are defaulting at a significantly lower rate. With less risk and, in turn, less defaults, there are less foreclosures, meaning property values will stay where they are for the time being.
There’s Not Enough Supply
One of the biggest things that has defined our current real estate climate is the inventory or lack thereof. More homes come available year after year, but it’s not matching the increases in population and demand.
With limited to no inventory, prices should remain high and continue rising at a steady rate. Most experts believe we’ll see between a 1.4% and 4.1% increase in home values, so the market will stay stable in 2024 if this trend continues.
Will We Ever See a Buyer’s Market Again Without a Crash?
Limited housing supply and soaring interest rates are keeping would-be buyers at bay, but what will it take to inspire more Americans to get in the saddle and start house hunting again? Will it ever be a good time to buy if there’s no real estate crash?
Of course. Later in 2024, we’re expecting to see interest rates fall, which will make homeownership more affordable again despite the rising property values. What that means is you can get a great deal on a great property at an affordable rate, and your investment will grow over time.
In many ways, it’s the preferable route because, once you purchase your home, your equity and the value of your investment will grow, securing you a sizable return in the process. Plus, you get to simultaneously shed the shackles of renting, which, despite its many perks, is often not as financially sound as investing in real estate.
So, the climate may remain challenging for new homeowners at this time, but there is relief on the horizon and buying real estate remains among the best decisions you can make both in terms of having a great quality of life and in terms of wealth building.
Contact Us Today!
Analyzing the current state of the market is tricky, but our years of experience give us unique insight into the landscape. We pride ourselves on providing this perspective to our clients, as well as an overall exceptional customer service experience.
But, don’t take our word for it; put us to the test! Contact us today and find out what makes us Westerville’s best!
