If you're a homeowner, it's a good question to ask. If you're not, it might be more important than ever. The real estate market can tell us a lot about where our economy is headed—and whether
Will the real estate market crash?
Dated: July 21 2022
If you're a homeowner, it's a good question to ask. If you're not, it might be more important than ever. The real estate market can tell us a lot about where our economy is headed—and whether now is a good time to buy or sell.
The first thing to know is that there's a lot of uncertainty in the real estate market right now. There are two main factors driving that uncertainty: interest rates and home prices. Interest rates are still low, but they're expected to rise further in 2022 as the Federal Reserve increases its benchmark rate by 0.25% each quarter. Home prices have also been rising steadily since 2016, but they're predicted to slow or even fall later this year as mortgage rates rise. That doesn't mean that the housing market will crash—it just means that we might see less growth than in the previous months.
Generally speaking, as the interest rates go up, we should start seeing the housing prices start steadily declining. Does this mean that the market will crash like it did in 2008? No! Rising interest rates will affect your monthly payment, however, homeowners always have the option to refinance their loan terms in as little as six months after they close on their new home, should the rates start to decrease.
Here are some things to consider before deciding when to make your next move:
- What is happening in your area? If there are many homes for sale but few buyers, then now might not be the best time to sell. But if there is a strong demand for homes in your area, then now might be an Ideal time to buy and sell!
- What is happening with interest rates? Interest rates change daily. This is something to consider as you start the home purchase journey. Our team will connect you with a local lender that will guide you on how the interest rates are fluctuating and will instruct you on when you should lock your rate for the home purchase.
If you are thinking about buying a home—or selling one that you own—this may be an Ideal moment for getting everything settled.
Former teacher turned Realtor®. I began my real estate career in 2015 after my Father-In-Law encouraged me to do so. I was still teaching full time and learning the ropes in real estate.am the bro....