Many home buyers are worried about a possible housing market crash. Here’s a simple explanation of what experts are predicting for the future:
➣ No crash expected soon. Experts largely agree that a crash is unlikely in the near future. The current lack of housing supply is one reason prices remain stable.
➣ Mortgage rates outlook. While high mortgage rates have been a barrier, there is optimism that they might ease by 2025, potentially making home ownership more attainable.
➣ Steady home prices. Despite the challenges, home prices are expected to continue rising, though at a slower pace.
Market Dynamics:
• Supply and demand: The U.S. faces a significant housing supply shortage, estimated between 2.3 million and 6.5 million units. This supply issue supports prices, preventing a crash.
• Demographic demand: First-time buyers, particularly millennials, are driving demand. As baby boomers exit the market, more houses will become available, which might help a little with the shortage of homes for sale, a trend known as the “silver tsunami.”
Past Influences:
• Impact of the last crash: The 2008 financial crisis slowed down new home building, leading to fewer homes available today. Stricter lending rules now help prevent big market crashes.
Predictions and Indicators:
• Price projections: Various forecasts suggest a modest increase in home prices (e.g., Fannie Mae predicts a 4.1% rise in 2025).
• Economic indicators: Watch for unemployment rates and foreclosure activities; these could impact market stability. A small rise in foreclosures was noted but isn’t enough to signal a crash.
Source: Business Insider
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Shirin Rezania Ramos | 858.345.0685 | www.shirinramos.com | Compass, DRE 0203379
