Do you consider yourself to be an expert on affordable housing? You might want to think again. With so much information available, everyone seems to have an opinion on the best way to approach home buying and selling. And because of this, misconceptions and outright myths about the state of the market are emerging on both buyers and sellers. Doing your research will be the first step to know what is best for you. So, here are the top three housing market myths and the reasons why experts disagree with them.
1. Similar to 2008, the Housing Market is About to Crash
Some prospective buyers are almost hoping that we are in a bubble as a result of the current buy-sell impasse. Nobody can blame a buyer for hoping for a lucky break when they are facing the rising home prices and interest rates. However, the truth is that the 2008 housing market crash set off a recession that resulted in record-breaking job losses. But that is not the case today.
Most experts agree that it’s difficult to predict a bubble until it’s in the rearview mirror. Even if we are currently in one. Things are very different from how they were in 2008. As a matter of fact, nearly 50% of homeowners today have equity. And the factors influencing home prices today are totally different from 2008.
2. Homeowners are Sitting on a Very Good Rate, they Won’t be Able to Sell
The lack of available housing is one of the biggest issues with the current housing market. Realistically, what would cause sellers to negotiate given the unbeatable interest rates available two years ago? Giving up a low long-term rate doesn’t make sense when viewed from the seller’s perspective. Although, life circumstances inevitably push property owners to sell. So, there’s always going to be homes up for sale.
3. Home Prices will Decrease as Rates Increase
Many would-be homebuyers believed that lower home prices would result from higher interest rates. However, the link between interest rates and house prices is not simple. In reality, home prices have varied greatly this year and across cities. Inventory is still the main factor influencing home prices. Additionally, in the most sought-after areas, a move-in ready, updated home may still receive multiple offers. It is important to note that the high-interest rates of today can be refinanced later. And when those lower interest rates return, housing prices will probably be higher than they are right now.
The Bottom Line
In a nutshell, don’t trust everything you hear about buying a home. It’s simple to feel overloaded with information about what you should and shouldn’t do. However, some of the persistently asserted housing-related problems are untrue. Therefore, it is always better to trust your local expert.
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