The Top 5 Reasons a Housing Market Crash is Not a Given

Real estate prices have never been higher, and there are no signs of them slowing down soon. While the stock market and other asset classes, such as precious metals, have collapsed, housing market prices keep defying gravity.

Hence why many are asking the question: will the housing market crash?

That’s a 26.5% increase over the past two years.

Is the Bubble About to Burst?

As per a recent Redfin survey, 77% of homeowners think there is a bubble in their home area. Is this a sign the housing market will crash? Not necessarily.

Fifteen years ago, permissive lending standards and rampant investor speculation fueled high housing prices. Today, the market is very different.



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In simple terms, demand is outstripping supply, pushing up prices and giving the market a bubble-like feel. Prices haven’t been this frothy in the U.S. home market since the mid-2000s.

Indications of a Housing Market Crash?

According to Home Point Financial’s Phil Shoemaker, the one thing he keeps getting asked is, “Is this a bubble?” The answer is that while the housing price appreciation we’re witnessing is reminiscent of a bubble, you’re unlikely to conclude the same if you dig into the fundamentals.

As it turns out, the underlying conditions of today’s housing market are on a much more solid foundation than they were 15 years ago. But it’s not all smooth sailing.

5 Reasons There Won’t be a Housing Market Crash

1. Stockpiles Have Dropped to Historic Lows Homebuyers had just 2.4 months of supply in September, according to the National Association of Realtors (NAR). The stockpile was down to just 2.0 months’ worth of supplies in February.

Like any commodity, such as oil, house buyers bid up prices because of a lack of available products.

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