Published: Feb. 23, 2023 – Source: Keeping Current Matters
Is the Housing Market in Correction? A Real Estate Pro’s View, (Separating Fact from Fiction)
Everyone has heard the talking heads speak about the residential housing market. The real estate market is shifting, and when that happens, it can be hard to separate fact from fiction. That’s where I come in. With decades of experience, I will help clear the rumors the headlines are giving so you can really understand today’s market and what it means for you.
Here are three common housing market myths you might be hearing, along with the expert analysis that provides better context.
Myth 1: Home Prices Are Going to Fall
One piece of fiction many buyers may 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. A few you might be seeing right now 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. 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 project 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.
No matter what you’re hearing about the housing market, trust the experts and partner with Sunny & Associates Realty. When with us, 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. It’s having a Real Estate Guru (Concierge) at your service. Contact a Real Estate Concierge by clicking on the link below.
Search Tags: housing market correction