If you’re following the news, chances are you’ve seen or heard some headlines about the housing market that don’t give the whole picture. The real estate market is shifting, and it can be hard to separate fact from fiction. That’s where a trusted real estate professional comes in. We can help debunk the headlines so you can 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 is an increase in home prices, but at a slower pace.
The fact is that 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 this will continue 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 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, the Lead Analyst for Housing Wire, 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 from 2005 to 2008 couldn’t be more incorrect, as we haven’t had a credit boom 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 hear about the housing market, trust the experts and partner with us to have a knowledgeable authority who knows the market’s ins and outs, including current trends, historical context, and much more.