Most Commonly Asked Questions Today About the Housing Market
Everybody that's shopping for a home or looking to sell their home has questions about the housing market today. There are plenty of questions out there and some are more common than others. Let's look at some of the most commonly asked questions today about the housing market.
Will the Housing Market Crash?
This is a question that comes up anytime things are a bit irregular. While some experts don't think the market will crash, others do. It depends on what the expert considers a housing market crash and what they see coming in the future. Often, it's hard to predict these things, but when the sully is low and demand is high, a crash is unlikely.
While the housing market might seem a bit unhinged, most real estate experts don't think a crash is coming. Many people have plenty of equity in their homes and there are plenty of buyers still looking for a home.
What has caused the Housing Market to Be so High Right Now?
Another common question many ask is why housing prices are so high right now? It's really due to basic economics. There is more demand than supply, so more buyers are fighting over homes than before. Bidding wars have become very common when a home is listed for sale.
The lack of supply was caused due to a slow in new home construction and, of course, COVID-19. Fewer homes were built throughout the 2010s compared to any decade going back to the 1960s. This has caused more demand than supply, which means higher prices.
Is There a Slow Down Coming for the Housing Market?
Likely, there will be a slow down at some point. The old adage, "what goes up must come down" tends to be true in the real estate market. If mortgage rates go up, a cool down is likely within the housing market.
When Will the Housing Market Crash?
We have covered this question already, to an extent. The real estate experts that think a crash is coming have different timeframes. They range from as soon as six months from now to a few years from now.
If the real estate market gets out of hand, it will likely be due to people speculating on homes. When buyers start to think home prices will always go up and start buying homes only to sell them, it can lead to a housing bubble. Currently, there is an uptick in activity from investors.
If investor activity continues to surge, it's likely a crash will come, eventually. When that might come, nobody really knows and even the best experts are just taking an educated guess.
When can we expect the housing market to get better?
For sellers, they already think the housing market is great, but for buyers, it's a war out there. If the Fed keeps raising interest rates through 2022, the demand will likely slow down. This could help return the market to a more balanced place.
However, interest rates going up will make buying a home more expensive, which doesn't really make the market better. When fewer people can afford to buy a home, it isn't necessarily a good thing.
When more homes are being built, you can expect to see the market improve. This is one of the best ways to fill the demand for homes, but it's certainly not an overnight solution.
There are many questions about the housing market right now. Experts have been wrong before and they will likely be wrong again. Some say it will crash, others say it won't. Some say it will slow down, others don't see a slowdown. Only time will tell what is really going to happen.