Is a Housing Correction Coming?
Is a housing correction coming? According to Jonathon Russell at Mortgage Professional (MPA), the answer is yes. However, he is quick to note that although a housing correction is coming, it is not a housing ‘crash’. He states there is a difference between a correction and a crash. He also notes a silver lining – this is actually a benefit to some.
First off, he defines a ‘correction’ as when property prices fall below 10% of their top market value. He notes that this situation often occurs when home sales slow down and there is an increase in inventory on the market. The good news is, it’s predicted to fall short of an actual crash. As an attempt to fight rising inflation, interest rates in the US rose This caused some home prices to drop – mainly in areas when the housing markets were overinflated before inflation and rate hikes. (You can read the full article by Jonathon Russell here:
“Will there be a correction in the housing market?”
So where’s the benefit?
Well it depends on which side of the negotiation table you are sitting on. Typically, situations like this one is better for homebuyers than it is for sellers. The current market creates an option for millennials to become closer to home buying and the buyers in this group rose to 43% this year over 37% last year. Although economists are predicting average prices stalling due to a correction, this could enable potential homebuyers to enter the housing market.
Affordability and rising interest rates are still important issues that impact housing markets. Issues as these add to the cost of buying a house. Yet, corrections are temporary. So if you are contemplating buying, remember you are marrying the house, but you are dating the interest rate. There are also many new options and programs for mortgages and financing. If you want to discuss your options, reach out to us and we will help you and guide you through the process.
Your friend and Realtor ®,
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