A Real Estate Professional Helps You Separate Fact from Fiction
If you're keeping up with current events, you've undoubtedly seen or heard some news stories about the housing market that don't tell the full story. When the real estate industry changes, it's easy to get confused. That's where an experienced real estate professional comes in handy. They can assist you in debunking the media trends so that you may really comprehend today's market and its significance for you.
Here are three common housing market misconceptions, along with expert commentary providing greater context.
Myth 1: Home Prices Are Going To Fall
Many people may have come across or heard the idea that house values will plummet. That's because headlines frequently employ similar, yet distinct, words to describe what's going on with prices. A few of the ones you're seeing 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.
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 widespread misconception is that the housing market is in a decline. That isn't the case, either. 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.”
Home values are continuing to rise, as previously stated. Experts anticipate them to continue at a slower rate, which means the housing market isn't in a recession because prices aren't declining. It's just slowing down compared to the past two years when it was record-breaking in nearly every way.
Myth 3: The Housing Market Is Going To Crash
Some headlines are frightening that the housing market is on the verge of bursting. However, according to experts, today is nothing like 2008. One of the reasons for this is because lending standards are much stricter 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.”
It is now considerably more difficult to obtain a mortgage than it was during the last housing bubble. Since then, lending standards have been ratcheted up significantly, and purchasers who took out a mortgage over the previous decade are far more qualified than they were back in the years leading up to the crash.
Connect with The Perreault Group regardless of what you're hearing about the housing market. You'll have a knowledgeable authority on your side that understands the ins and outs of the market, including current trends, historical context, and so much more.