Know Fact from Fiction

Chances are you’ve seen or heard some headlines in the news about the housing market that doesn’t give the full picture. The real estate market is shifting, and when that happens, as it naturally does, it can be hard to separate fact from fiction. That’s where a trusted real estate professional can help. They can help debunk the headlines so you can have an accurate understanding of the housing market and what it means for you.

Here are three common housing market myths you might have heard, along with the expert analysis that provides a more clear idea.

Myth 1: Home Prices Are Going To Fall

One piece of fiction many people have seen or heard is that home prices are going to crash. That’s because headlines often use similar, but different, terms to describe what’s happening with prices. Some you may have seen include:  

  • Appreciation, or an increase in home prices.
  • Depreciation, or a decrease in home prices.
  • And deceleration, which is an increase in home 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 home prices will continue rising and won’t fall. But they will rise more slowly. Selma Hepp, Deputy Chief Economist at CoreLogic, explains:

“. . . higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”

Myth 2: The Housing Market Is in a Correction

Another common myth is that the housing 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, home prices are still appreciating, and experts agree that will continue, just at a slower pace. That means the housing 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 Housing Market Is Going To Crash

Some headlines are generating worry that the housing 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 housing 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. 

In Essence

No matter what you’re hearing about the housing market, let’s talk about it. 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. I'm here to help. 

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