REAL ESTATE FACT VS FICTION
There are likely some headlines regarding the housing market that you have seen or heard if you keep up with the news. Fact from fiction can be difficult to distinguish when the real estate market is altering. An experienced real estate agent can help in this situation. So that you can truly comprehend the market today and what it implies for you, they can assist you disprove the headlines.
Here are three widespread housing market falsehoods you may have heard, along with the professional analysis that puts them in a more accurate perspective.
Myth 1: Home prices will decrease
The idea that property prices are about to plummet is one urban legend that many purchasers may have seen or heard. This is due to the fact that headlines frequently describe what's happening with prices using comparable but different phrases. You may currently be seeing some of the following:
a rise in housing prices, or appreciation.
decline in housing values, often known as depreciation.
And deceleration, which is a slower but still upward trend in housing prices.
In actuality, specialists do not advocate for a reduction in pricing. Instead, they predict that appreciation will still occur, but more slowly. This implies that housing prices will continue to rise and not decrease. Selma Hepp, CoreLogic's deputy chief economist, explains:
“. . . higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”
Myth number two: The housing market is in a slump.
Another common misconception is that the housing market is in a slump. That, once again, is not the case. This is why. Forbes reports that:
“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.”
Myth 3: The Housing Market Will Collapse
Some headlines suggest that the housing market is a bubble about to burst. However, experts say that today is nothing like 2008. One reason for this is that lending standards are very different today. Logan Mohtashami, HousingWire's Lead Analyst, 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 was much easier to get a mortgage during the previous housing bubble than it is today. Lending standards have tightened significantly since then, and buyers who obtained a mortgage in the last decade are far more qualified than they were in the years preceding the crash.