If you’re following the news, chances are you’ve seen or heard some headlines about the houszing market that don’t give the full picture. The real estate market is shifting, and when that happens, it can be hard to separate fact from fiction. That’s where a trusted real estate professional comes in. They can help debunk the headlines so you can really understand today’s market and what it means for you. Here are three common houszing market myths you might be hearing, along with the expert analysis that provides better context.
Myth 1: Housz Prices Are Going To Fall One piece of fiction many buyers may have seen or heard is that housz prices are going to crash. That’s because headlines often use similar, but different, terms to describe what’s happening with prices. A few you might be seeing right now include:
Appreciation, or an increase in housz prices.
Depreciation, or a decrease in housz prices.
And deceleration, which is an increase in housz prices, but at a slower pace.
The fact is, experts aren’t calling for a decrease in prices. Instead, they forecast appreciation will continue, just at a decelerated pace. That means housz prices will continue rising and won’t fall. Selma Hepp, Deputy Chief Economist at CoreLogic, explains: “. . . higher mortgage rates coupled with more inventory will lead to slower housz price growth but unlikely declines in housz prices.”
Myth 2: The Houszing Market Is in a Correction Another common myth is that the houszing market is in a correction. Again, that’s not the case. Here’s why. According to Forbes: “A correction is a sustained decline in the value of a market index or the price of an individual asset. A correction is generally agreed to be a 10% to 20% drop in value from a recent peak.”
As mentioned above, housz prices are still appreciating, and experts project that will continue, just at a slower pace. That means the houszing market isn’t in a correction because prices aren’t falling. It’s just moderating compared to the last two years, which were record-breaking in nearly every way.
Myth 3: The Houszing Market Is Going To Crash Some headlines are generating worry that the houszing market is a bubble ready to burst. But experts say today is nothing like 2008. One of the reasons why is because lending standards are very different today. Logan Mohtashami, Lead Analyst for HousingWire, explains: “As recession talk becomes more prevalent, some people are concerned that mortgage credit lending will get much tighter. This typically happens in a recession, however, the notion that credit lending in America will collapse as it did from 2005 to 2008 couldn’t be more incorrect, as we haven’t had a credit boom in the period between 2008-2022.”
During the last houszing bubble, it was much easier to get a mortgage than it is today. Since then, lending standards have tightened significantly, and purchasers who acquired a mortgage over the last decade are much more qualified than they were in the years leading up to the crash.
Bottom Line No matter what you’re hearing about the houszing market, let’s connect. That way, you’ll have a knowledgeable authority on your side that knows the ins and outs of the market, including current trends, historical context, and so much more.